The Confederation of Indian Textile Industry (Citi) has urged the government to speed up clearances of projects under the technology upgradation fund scheme (TUFS). In a letter to the Centre, the association, representing the entire textile value chain from yarn to garments, has said that if immediate remedial measures are not taken, the momentum achieved in modernisation and expansion of the industry would be affected.
Citi has pointed out that investments in the textile and clothing industry, which have achieved significant buoyancy with increased domestic consumption and larger exports after abolition of quotas, are running into a crisis, with disbursement of interest compensation under the TUFS of the government virtually coming to a standstill.
Citi in its letter has also pointed out that a large number of claims for TUFS assistance for the October-December 2005 quarter are yet to be cleared and in for the January-March 2006 quarter, there has practically been no disbursement. The backlog from 2005-06 amounts to more than Rs 200 crore and the funds available for the current year out of the allocation of Rs 535 crore made in the Union Budget will, therefore, be less than Rs 353 crore, the association has said.
The letter added that with increasing investments in various segments of the industry, the fund requirements for TUFS for the current year can be met only if the allocation is increased at least to Rs 900 crore. Citi has also stressed that capacity building would be a key to keep up the momentum.
