CITI sought additional allocation of funds under TUFS for spinning sector

The Confederation of Indian Textile Industry (CITI) on Friday sought additional allocation of around Rs.3,000 crore under the Technology Upgradation Fund Scheme (TUFS) stating unhealthy conditions faced by spinning sector.

The additional allocation will help clear the subsidy amount pending for earlier commitments from December 2014 to March 2015 under the TUFS scheme and also for new investments this year.

Prem Malik, Chairman of Confederation of Indian Textile Industry, said that the Government should provide Rs.3,000 crore additional allocation for the scheme for 2015-16. Textiles is a capital intensive industry and the two percent to five per cent subsidy on interest available through the scheme helps the industry improve its competitiveness.

This was required urgently since committed liability was delayed and there were no further funds for new investment in the sector. Such a step would help textile industry to participate in Make in India programme, Malik said.

The scheme is valid till 2017 and the Government should provide adequate allocations for it. The industry is facing several challenges and during the last three years, investments were to the tune of Rs.27,000 crore to Rs.30,000 crore. Investments are expected to be minimal if the scheme is not there as the capital cost is high for the textile and clothing sector and they need an element of rebate on interest.

Sources in the industry added that nearly 35 percent of textile and clothing production in the country is exported. The scheme helps the industry improve its efficiency and competitiveness by upgrading the technology.

Similarly, CITI also wanted the Cotton Corporation of India to look into the stocks and provide quality cotton to the mill sector for consumption at prices equal to the actual import prices.