New panel to review TUF performance

Vijay Trivedi

Mumbai, Dec 2: The high level textile committee under the chairmanship of NK Shing (member Planning Commission), at its meeting later this month is expected to announce steps to revive the Technology Upgradation Fund (TUF)’s performance, said Textile Minister Kashiram Rana. “I confess TUF set up to enhancing and improve local textile technology has not achieved its target.”

“Following the unsatisfactory performance of TUF, mainly from small scale manufacturers, we have submitted our proposals, including changes in Sidbi rules and procedures, to the Finance Minister” Mr Rana said. Mr Rana was in Mumbai on Friday to address participants of the textiles industry as also to distribute awards at the The International Fashion Awards function organised by Confederation of Indian Apparel Exporters (CIAe).

The new committee was set up last October under the direct supervision and intervention of Prime Minister Atal Bihari Vajpayee. Members of the high level committee comprise of minister of textile, minister of commerce and representatives of the planning commission.

Speaking to The Financial Express, Kashiram Rana said, We expect disbursements under TUF to be over Rs 14,000 crores, but actual acceptance is hardly of around Rs 4,000 crores till date. This is very poor response from the industry despite very hard efforts to try to mobilise funds”. “This was due to various hurdles faced by the textile unit owners in getting funds from the financial institutions, particularly from Sidbi. We have sent our proposals to the Finance Ministry for necessary changes to be made in Sidbi rules and procedure. This will help the small players to get easy loans in short time.” Mr Rana said.

The nodal agencies under the TUF scheme for different segments are, Industrial Development Bank of India (IDBI) for the textile industry excluding SSI sector, Sidbi for SSI textile sectors and Cotton ginning and pressing sector and Industrial Financial Corporation of India (IFCI) for the jute industry.

Addressing members of the apparel industry at the International Fashion Award distribution in Mumbai last Friday Mr Rana said, “In order to tackle the immediate problems faced by the industry and to restore the confidence of the industry, a crisis management cell (CMC) has been set up in my ministry. This CMC will interact with exporters to resolve their problems in consultation with the concerned central ministries on a time-bound basis.”

Meanwhile, the European Union (EU) granted nil import duty status for garments coming from Pakistan. Other neighbouring countries like Bangaladesh and Sri Lanka are already enjoying the same from EU. This nil duty movement had given a major shock to the Indian garments. However, Mr Rana appeared positive, “Recently in a meeting with Mr Pascal Lamy, the Trade Commissioner for European Union, I had discussed the issue of increased market access for our textile and clothing products.” He added, “Mr Pascal has given a very positive response and is willing to consider India’s request to opening up EU market”.

Lastly, while commenting on TUF failure, CIAe president, Mr Amit Goyal:”It was long standing demand from the SSI to modify and simplify the procedure take TUF from Sidbi. Exporters look forward early implementation of modification for the same”
Where as All India Garment Exporters and Manufacturers Association , President, Mr Madan Jain said, “At present the amount borrowed under TUF is really tough for the small scale units. TUF is absolutely a failure.” “But if the Government simplifies the Sidbi rules and procedures will be welcome by the SSI and help to boost the revamping of outdated machinery.”