Indian industry textile sector gets financial support

Indian industry textile sector gets financial support

The new scheme specifically targets employment generation and exports in apparel and garment industry. It will provide employment to women in particular and increase India’s share in global exports; promote technical textiles for export and employment; promote conversion of existing looms to better technology looms for improvement in quality and productivity; encourage better quality in processing industry and checking need for import of fabrics by the garment sector

The Cabinet Committee on Economic Affairs, chaired by Indian Prime Minister Narendra Modi, has approved the introduction of ‘Amended Technology Upgradation Fund Scheme (ATUFS)’ in place of the existing Revised Restructured Technology Upgradation Fund Scheme (RR-TUFS), for technology upgradation of the textiles industry. Industry associations such as AEPC, CMAI, SIMA, FICCI and ITF, among others, have welcomed the move, and expect it to provide a positive thrust to the textile industry.

The new scheme specifically targets employment generation and exports in apparel and garment industry. It will provide employment to women in particular and increase India’s share in global exports; promote technical textiles for export and employment; promote conversion of existing looms to better technology looms for improvement in quality and productivity; encourage better quality in processing industry and checking need for import of fabrics by the garment sector.

Rahul Mehta, President, CMAI feels, the new scheme is a relief to the entire textile sector, especially because the RR-TUFS was in a limbo and no unique ID, which is the formal sanction under the scheme, has been issued after September 2014. “Allocating nearly Rs 13,000 crores (1985 million USD )for clearing the committed liabilities will help in clearing the backlog pending for issuance of UIDs and also the large number of so called ‘left out cases’ that have been pending for a decision for nearly four years,” he said.

AEPC Chairman, Virender Uppal believes ATUFS will provide the much needed thrust for the expansion and growth of the apparel industry along with the employment generation in India. Reiterating similar views, Shishir Jaipuria, Chairman, FICCI Textiles and Technical Textiles Committee says, “The approval has come as a great relief to the industry especially when the exports were declining in textile and apparel sector. The focus on employment generation and export under the new TUFS by encouraging apparel and garment industry and promotion of technical textile sector, is indeed a welcome step which will help in furthering the cause of Make in India.”

Under the ATUFS, all cases pending with the Office of Textile Commissioner which are complete in all respects shall be provided assistance under the ongoing scheme and the new scheme will be given prospective effect.

‘Make in India’ gets renewed attention

The amended scheme is expected to boost ‘Make in India’ initiative in the textiles sector and attract investment to the tune of one lakh crore rupees, and create over 30 lakh jobs. A budget provision of Rs 17,822 crores (USD 2721million) has been approved, of which Rs 12,671 crores (USD 1935million) is for committed liabilities under the ongoing scheme, and Rs 5,151 crores (USD 787 million) for new cases under ATUFS.

Office of Textile Commissioner (TXC) is being reorganised; its offices shall be set up in each state. Officers of the TXC shall be closely associated with entrepreneurs for setting up the industry, including processing proposals under the new scheme, verifying assets created jointly with the bankers and maintaining close liaison with the State Government agencies.

M Senthilkumar, Chairman, The Southern India Mills’ Association (SIMA) welcoming the timely move by the government, said that the ATUFS would enable the textile industry to ease their financial position and to plan investments. He appreciated the announcement of ease of doing business, as well as the reorganisation of the Office of the Textile Commissioner so that the TxC could closely associate with the entrepreneurs, bankers and state governments and implement the projects on a fast track mode.

The implementation of the scheme would be executed and monitored online under iTUFS, launched in April 2015. Under the new scheme, there will be two broad categories: apparel, garment, and technical textiles, where 15 per cent subsidy would be provided on capital investment, subject to a ceiling of 30 crores rupees (4.581million USD), and for entrepreneurs over a period of five years, and the remaining sub-sectors would be eligible for subsidy at a rate of 10 per cent, subject to a ceiling of Rs 20 crores (USD 3.054 million USD).

Mehta stated that the apparel industry was not very capital intensive, but given the sub-scale operation of production facilities in this segment, and the need to achieve economies of scale for competing with large units in countries like China, Bangladesh and Vietnam, the higher assistance to the apparel segment (in comparison to other segments) will prove to be highly beneficial in pushing both employment and exports in our textiles sector.

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