Budget 2018: More money in TuF scheme to stoke investment in textile sector

The increased allocation in the Union Budget for the Technology Upgradation Fund Scheme (Tufs) is likely to bring a lot of investment to the sector, primarily in garments.

There is a 14 per cent increase in the allocation at Rs 23 billion for 2018-19. Started in the 1990s, the scheme incentivises upgrading of plant and machinery, in addition to setting up of new projects for weaving, processing and garmenting. “This is a positive step and will help in clearing some of the committed liabilities under Tufs,” said Ujwal Lahoti, chairman of the Cotton Textiles Export Promotion Council. The Budget also proposes to raise the outlay to the comprehensive sector package for apparel and made-ups from Rs 60 billion to Rs 71.5 billion, which should promote output and exports in these two labour-intensive sectors. Fabrics are also likely to be covered under the Return of State Levies scheme.

Rahul Mehta, president of the Clothing Manufacturers Association of India, said in addition to specific provisions for this industry, the general focus of the Budget on the rural economy would help push demand for apparel.  

“Apparel manufacturing involves significant domestic transportation of raw material, as well as finished goods. Infrastructural bottlenecks have been hindering this industry. 

Hence, the increased focus on infrastructure will help the apparel industry grow further,” he added. Kavita Gupta, textile commissioner, recently stated the textile and clothing industry had promised the government to bring in investment of Rs 800 billion, along with the creation of employment opportunities for 10 million people, within three years.

 Of this, two years have passed; the investment has been Rs 70 billion, with employment generated for only 100,000 people.