Technology fund welcomed

At a time when the entire domestic textile industry is reeling under the rupee effect, the Cabinet Committee on Economic Affairs' (CCEA) approval of the Technology Upgradation Fund Scheme (TUFS) has been welcomed by the industry.

TUFS was put in abeyance from the beginning of the current financial year. CCEA has approved the modified scheme for implementation during the 11th Five Year Plan (2007-12).

P D Patodia, the chairman of the Confederation of Indian Textile Industry (CITI), said, "The upfront capital subsidy of 10 per cent extended to the apparel and technical textile segments, in addition to 5 per cent interest reimbursement, will encourage these potential segments of the industry."

Due to the non-implementation of TUFS, investments to the textile sector had slowed down and the textile machinery industry was also facing problems.

In a statement, CITI said, "With the clearance of the scheme, the investment momentum will improve and the textile machinery industry will be able to improve its capacity utilisation."

Meanwhile, the Apparel Export and Promotion Council (AEPC) has presented a charter of demands to the government seeking sops and rebates for a short period to overcome the rupee rise.

"We have sought sops from the Ministry of Textiles for a period of 6-12 months to enable us to tackle the crisis facing the textile and apparel sector," said Vijay Agarwal, chairman, AEPC.

Demands include refund of all state-level taxes through the drawback route, cheaper packing credit, refund of service tax and relaxation in labour laws to allow contract labour.

According to AEPC, in case the demands are met, it will cost the government around Rs 1,800-2,000 crore.