Shekhar Agarwal urges continuance of TUFS

07 Dec '06

2 min read

Shri Shekhar Agarwal, Chairman, Confederation of Indian Textile Industry (CITI) has stated that the entire textile and clothing industry is highly disturbed by reports appearing in the press indicating that Government is hesitant to extend Technology Upgradation Fund Scheme beyond its current expiry on 31st March 2007.

After a long period of negative policies in licensing as well as fiscal matters, Government has initiated some very positive policies in recent years and rationalisation of excise duty structure and establishment of TUFS are the most effective among these, he added.

Shri Agarwal has pointed out that utilisation of TUFS was slow initially when it was introduced in April 1999, since the industry was constrained by a very complicated excise duty structure with a significant bias against large and organized production facilities.

With the rationalization of excise duty structure, utilization of TUFS has picked up substantially during the last 2 to 3 years.

From a level of less than Rs. 1500 crore per year 3 years back, investment in this scheme last year has crossed Rs. 15,000 crore and this year it is expected to breach Rs. 30,000 core.

He has observed that with the abolition of quotas on exports and the conducive policy environment provided by the Government to the textile and clothing industry currently, the whole sector is in a resurgent mode.

TUFS has played an important role in increasing investments in modernization, consolidation and expansion across the value chain and fibre lines in the sector.

The outgo of government funds in this scheme is minimal considering the benefits that the scheme provides in terms of increased industrial production, exports and substantial additional employment opportunities, he points out.

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Confederation of Indian Textile Industry

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