2,546-CR TEXTILE SUBSIDY OKAYED

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THE government will provide a subsidy of Rs 2,546 crore to domestic textile firms for upgrading their manufacturing units, textiles Minister Dayanidhi Maran said.

“(The) Rs 2,546 crore worth subsidies will reach the beneficiaries in 72 hours,” the minister said at a press conference. The help is extended under the technology upgradation fund scheme (TUFS), which gives 5% interest waiver on bank loans taken by textile companies for buying latest plants and machinery.

The move will give relief to the sector, which is reeling under the impact of a global slump in demand, Mr Maran said. The money will be sufficient to meet requirements of all applicants, who applied under the scheme up to June 30, 2009. “The fund will be transferred electronically through more than 121 financial institutions and banks to the accounts of 12,514 beneficiaries,” Mr Maran said.

Units awaiting funds under TUFS have expressed joy over the announcement. Said Arvee Denim MD Ashish Shah, “We were entitled to claim subsidy under TUFS for the last one-and-a-half to two years. We will be able to get the money now.”

However, some players are unhappy over the government’s inaction with respect to solving the problems of export-oriented textile units. “Textile exports have increased from China, Bangladesh and Pakistan while shipments from India have declined. Under the circumstances, the government should provide tax relief on inputs to export-oriented units to make them more competitive,” said textiles consultant Nayan Parikh.

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