The cotton textiles export promotion council (Texprocil) has expressed deep concern over suggestions that the government at the highest levels may not grant an extension to the Textile Upgradation Fund Scheme (TUFS), Shri Prem Malik, Chairman, Texprocil stated in a press release. The suggestion has sent shockwaves in the textile industry both amongst the manufacturers and exporters as the TUF scheme which launched in 1999 had provided a fresh lease of life to the textile industry which was now coming into its own, after facing severe restrictions for years both in the domestic and international areas.

The industry has shown an exceptional turn around during the last few years owing to the progressive policies of the Government, especially the TUF scheme. The yarn production has increased without significant increase in operational spindleage, indicating thereby that funds under the TUF Scheme have been utilised for modernization and increasing productivity; whereas production of fabrics had also recorded a CAGR of almost 4.5 percent during he period 2002-2006 mainly on account of the TUF Scheme.

The processing sector had also gained under the TUF Scheme with almost 22.3 percent of the total investments going into this sector during the period April-September 2006. With the Home Textiles and Ready Made Garment segments showing excellent growth, there is an urgent need to strengthen the spinning, weaving, processing, and stitching components of the textile industry.

Further, industry and trade have drawn up an ambitious plan of reaching a market size of US$ 110 billion by 2012, coinciding with the terminal year of the XIth Five Year Plan. The export market is expected to be around US$ 50 billion, while domestic market is expected to reach a size of US$ 60 billion from the present (2005-2006) level of US$ 29 billion.

The realisation of target would require huge investments with bulk of it being funded under the TUF Scheme as an investment of approximately Rs. 190,000 crore is envisaged which will provide additional employment to over 14 million people by the year 2012. With the industry depending heavily on the expensive imported machinery (over 70% of demand), the TUF Scheme was essential to offset the high capital cost.

Source: http://www.bharattextile.com/