India Would Soon Unveil a Modified with a Provision to Increase The Interest Subsidy

The Government of India would soon unveil a modified Technology Upgradation Fund Scheme (TUFS) with a provision to increase the interest subsidy on power looms from the present 5 percent to 6 percent, Textiles Minister K Sambasiva Rao has said.
 
The focus of the modified TUFS would be on the powerloom sector, which can help boost the country’s textile competitiveness, the Minister said after releasing a study on “Benchmarking of the textile production cost in India vis-à-vis Bangladesh, China, Egypt, Indonesia, Pakistan &Turkey’’ undertaken by Zurich-based consulting firm GHERZI and Cotton Textiles Export Promotion Council of India (Texprocil).
 
The Minister said, “We are now proposing to increase the interest subsidy on power looms to 6 percent.” He added that the modified TUFS would be soon rolled out.
 
Mr. Rao also said that he would soon put forward a proposal to link the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) with the textile sector to impart training to about 1.5 million workers over the next three years.
 
MNREGA, launched in 2006, guarantees 100-day employment in a year for rural poor people.
 
The Minister said MNREGA type of employment in the textile sector would help minimize the problems of skilled labour.
 
The study by GHERZI and Texprocil said India has a long way to go in catching up with China, which had over 35 percent share in global textiles trade in 2011. China clocked export figure of US$ 248 billion in 2011, compared to India’s US$ 29.4 billion.
 
Talking about India’s domestic cotton textile industry, the report said, it has a potential to grow to US$ 140 billion by 2020 from its present level of US$ 60 billion, and in the process generate about 2 million new direct employment opportunities.
 
To realize this potential, the report identifies three key focus areas—adequate availability of raw materials, particularly cotton, at competitive prices; a predictable policy regime that ensures stable enabling environment; and development of physical infrastructure to ensure quick movement of goods across the country.