Financial Daily from THE HINDU group of publications
Wednesday, Aug 04, 2004
Industry & Economy
Ministry to streamline norms for easy disbursal of TUFS funds
The Union Minister for Textiles, Mr Shankersinh Vaghela.
New Delhi, Aug. 3
AS the performance of the Rs 25,000-crore Technology Upgradation Fund Scheme (TUFS) has not been satisfactory over the last five years, the Ministry of Textiles has proposed to streamline the procedures to ensure faster disbursal of loans to benefit the industry directly, the Union Textile Minister, Mr Shankersinh Vaghela, said on Tuesday.
Addressing newspersons here, the Minister said that recently he held a meeting of the chiefs of various banks and financial institutions in Mumbai and stressed the need to make the application process more client-friendly. He also directed the senior officials, including the Textile Commissioner, to take immediate steps to make TUFS popular among the units in the textile sector.
He said that of the earmarked fund spread over a span of five years since 1999 when the TUFS was launched, the amount disbursed till date, the final year of the TUFS, was only Rs 7,000 crore. "It is hoped that advances to the tune of Rs 3,000 crore to Rs 4,000 crore would be disbursed by the end of this fiscal under TUFS," Mr Vaghela said.
Stating that the main reason for the deficient investment into the textile industry was due to the complex, discomforting excise duty structure, Mr Vaghela said the industry was also hamstrung by the vicious cycle of loan repayment and consequent sickness. High customs duties on import of raw material and capital goods in the sector had also been responsible for preventing the modernisation.
The Minister, however, took credit for having "studied" the problems plaguing the textile industry by recommending to the Finance Minister "far-reaching changes in the excise duty structure by abolishing the complete Cenvat chain and reducing the customs duty on import of machinery."
He maintained that fiscal duty reliefs given in the Budget would lead to reduction in cost of production, besides ensuring flow of investments of the order of Rs 60,000 crore in next five years in the textile sector.
He said the package of measures proposed in the Union Budget 2004-05 for the textile industry would equip it to meet the challenge of globalisation in the post-multifibre arrangement regime effective January 1, 2005besides pushing up the export of textiles and clothing from a level of $15 billion now to around $50 billion by 2010.
In response to questions, Mr Vaghela said that his Ministry was in touch with the Ministry of Agriculture to study the possibility of ushering second cotton crop in a year.
"Plans are afoot to give fillip to cotton growers for increasing yield per hectare" which would encourage farmers to go for organic cotton crop.
He also said a Cabinet note on jute was being prepared by his Ministry based on the recommendations of the Standing Advisory Committee.
The committee had favoured that the Jute Packaging Order could be diluted and a decision needs to be taken by next year on this. However, as jute remains an eco-friendly natural fibre, its popular use would be recognised and promoted through government efforts, he added.
The Minister said that to ensure marketing facilities to handloom and handicraft products in the export as also domestic markets, where the hold of middlemen was heavy, the Ministry was contemplating direct marketing of these traditional products to fetch a fair return to the artisans.
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