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Upgrading infrastructure in industrial clusters

By Our Special Correspondent

NEW DELHI NOV. 6. The Cabinet Committee on Economic Affairs today approved a special scheme for upgrading the infrastructure in selected industrial clusters that have a potential to become globally competitive. To begin with, 20 to 25 clusters across the country are to be taken up under the scheme.

A major highlight of the scheme is that it would be implemented through special purpose vehicles formed by the clusters or industry associations to ensure that the infrastructure developed or upgraded is user-driven and to ensure creation of useful assets and sustainability of the assets so created.

The projects to be taken up under the scheme would cover a wide range of activities, ranging from common facilities for transport, road, water, power, gas, fuel supply, effluent treatment, and solid waste disposal to product design, and information and communication technology support.

An allocation of Rs. 675 crores has been made for the scheme in the Tenth Plan. It is expected to help enhance competitiveness of Indian industry through increased productivity, lower costs of production and improved product quality. The aim is to increase India's share in the global market and generate additional employment opportunities.

Presided by the Prime Minister, A. B. Vajpayee, the CCEA also decided to extend the Technology Upgradation Fund scheme (TUFS) for the textile industry up to March 2007. It is now scheduled to come to an end on March 31next year.

In addition, it decided to enlarge the TUFS by offering small-scale powerloom units an additional option of an incentive of 20 per cent of the cost of modern weaving machinery up to Rs. 50 lakhs and facility to obtain credit from a larger network including all cooperative banks and non-banking financial companies recognised by the Reserve Bank of India. The move follows poor response from the powerloom sector to TUFS ever since it was launched in April 1999.

Upgradation of the powerloom sector has assumed importance particularly in the context of the total phase out of the export quota regime by the end of next year, as the sector accounts for 60 per cent of the total cloth production in the country.

Opium processing in private sector

<167,6p,1>The Union Cabinet decided to allow private sector into the business of opium processing. The decision follows demands from the pharmaceutical industry. Announcing the decision, Union Health Minister and Cabinet spokesperson, Sushma Swaraj, noted that there were now only two government-owned factories and their capacity was grossly inadequate to meet the needs of drug companies, which used opium as a raw material.

Speaking to reporters after the Cabinet meeting, she said the new private entrants would be subject to strict regulations to ensure that their product was used for legitimate purposes and not diverted.

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