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TUFS for Indian textiles sector to continue

15
May '12

Ms. Kiran Dhingra

The Indian textile industry's demand for prolonging the Technology Upgradation Fund (TUF) Scheme seems to have been addressed to some extent.

Textiles Secretary Ms. Kiran Dhingra said the scheme would continue at least for the time being. She informed that the Textile Ministry has proposed extension of the TUF scheme in the 12th Five Year Plan with an allocation of Rs. 158.86 billion.

The restructured TUFS attaches greater importance to the weaving, processing and value-added downstream segments of the textile producing industry. However, it did not meet the expected response, especially in the last year of the 11th plan, perhaps due to waning microeconomic situation, she said.

If the performance of the scheme does not improve even during the current year, the Ministry would have to re-examine and restructure it to make it more lucrative, she added.

Ms. Dhingra said they do not wish to extend a split scheme to processing beyond TUFS, and that they are quite sure that the Government would attach due importance to the processing segment, and the 12th plan would extend more assistance and encouragement to processing, as compared to that available under TUFS or any other scheme.

After her two day visit to Tirupur and the textile weaving park at Palladam, Ms. Dhingra admitted that the textile industry is in dire need of financial assistance. Although she refused to make any promises, she said that the matter would be brought to notice of the Finance Ministry, and the results would be known by May-end.

On debt restructuring, she said, the issue has drawn the attention of the Government over the past few years, as besides industry associations, the Textiles Ministry has also raised the issue before the RBI and the Ministry of Finance.

The Inter-Ministerial Committee would soon be updated regarding the troubles of the textile industry, as Bank of Baroda (BOB) Capital Markets is to present a report in this regard before the panel on May 18, to seek a debt restructuring package, she informed.

The report also incorporates the issue of working capital erosion due to sharp fluctuations in cotton prices last year, Ms. Dhingra said, and expressed hope that the committee would notice the issue.

Also, she informed that the Textiles Ministry has announced establishment of 21 integrated textile parks, in addition to the 40 textile parks for which the sums have already been earmarked. 24 of these 40 textile parks are already operational, while another 12 are on the verge of completion, she said.

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