CHENNAI: Tamil Nadu may emerge as a major beneficiary of the extension of the Technology Upgradation Fund Scheme, as projects costing at least Rs.10,000 crore are likely to be implemented by the textile industry in the next five years.

Senior officials of the Textiles Department have made their calculations on the basis of the State's record in utilising the scheme since its launch in 1999. So far, the Centre has sanctioned projects worth Rs. 48,000 crore. Tamil Nadu alone accounts for Rs. 12,000 crore, the officials say.

Given the scheme's benefits, the State had been urging the Centre to extend it beyond March 2007.

In August last year, Chief Minister M. Karunanidhi wrote to Union Textiles Minister Shankarsinh Vaghela, seeking its extension.

The extension of the scheme will help to generate more jobs. The officials say 35 lakh workers are employed in all the segments of the textile sector. They estimate that in the next five years, the number will double, as two-thirds of the requirement will be in garment making.

The scheme is meant to help textile units modernise their machinery. Different activities such as ginning, spinning, processing, weaving and garment making are covered. Handlooms and knitwear too come under the ambit of the scheme. The assistance is available in two ways: a five per cent back-ended interest subsidy is given to any unit, irrespective of its size, and a 20 per cent capital subsidy is given only to small and medium units. However, only one of the two components can be utilised.

The extension became imperative as the policy makers at the Centre felt that only with the help of such schemes that the country's textile sector could compete with the other countries. This had been reinforced by the country's not-so-impressive performance even during the post-textile import quota regime. Against China's share of 24.07 per cent of the global trade through the export of textiles and clothing, India's share was 3.37 per cent, according to the Economic Survey 2006-07. Though the sector has been recording a high growth in recent years, its competitiveness gets blunted owing to a number of factors including ageing machinery.

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