COIMBATORE: The textile industry has urged the Centre to continue during the next Five Year Plan period the Technology Upgradation Fund Scheme (TUFS), which expires in March 2007.

Reports that the scheme may not be extended beyond March 2007 are a matter of concern to the industry, says the Southern India Mills' Association Chairman, S. V. Arumugam. "Without the TUFS we cannot dream of textile expansion to this extent," he said.

The industry envisaged investments to the tune of Rs. 2 lakh crore during the next five years and generation of 15 million new jobs.

This would not be possible without the scheme. Textiles was a low-profit and capital-intensive industry. Hence, scaling up of operations was essential for it to be viable.

"The cost of funding should be competitive for this."

Mr. Arumugam pointed out that for the spinning mills, the interest component was about five per cent on the sale value of yarn.

Without the interest subsidy, which was now available under the TUFS, the profitability of the units would be affected. And, "if growth is not at this pace, employment creation will not be attained." India's share in the global textile and clothing trade was four per cent and this was expected to go up to seven per cent in the next five years. Mr. Arumugam said, "There is no attraction for new investments without the scheme."

Further, China would not have quota restrictions after 2008 and "if India does not grow now, it will miss the bus."

Compared to the size and technology level of textile units in the competing countries, India needed to increase the capacities and go in for modernisation.

Even schemes such as those for integrated textile parks would not take off without the TUFS, he said. He urged the Planning Commission to continue the scheme during the Eleventh Plan period.

The Cotton Textiles Export Promotion Council Chairman, Prem Malik, has said in a release that the scheme provided a "fresh lease of life to the textile industry."

Any move to discontinue it at this stage would "only prove disastrous."

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