Speaking at the economic editors' conference, Shyamal Ghosh, textiles secretary, said the technology upgradation fund will be the fulcrum for reviving the sector as it will receive a government grant to build a substantial corpus. On bank and institutional advances, it will provide a subsidy of five per cent.

The technology mission, with an allocation of Rs 60 crore, will look at ways and means of doubling cotton yield which is 288 kg per hectare and is at half the global level, he said. The earlier Rs 750-crore modernisation plan was applicable only to the spinning sector and hence the weaving and processing sectors of the industry had remained outdated, he said.

Pointing to India'scompetitiveness in raw materials and the flexibility of the textiles sector on account of its huge decentralisation, Ghosh said there was no reason why India would not be able to take advantage of the phase out of import quotas if it was able to upgrade its looms under the technology upgradation fund, saying only 7,000-8,000 of Indian looms are modern while in China the number of modern looms is about 60,000.

The government is considering another turnaround strategy for National Textiles Corporation (NTC) based on the Gujarat model of a voluntary retirement scheme (VRS), and on reviving only viable mills which can become profitable in 10 years' time, Ghosh said. Talks are now on with the finance ministry on financing the proposal which would carry a cost of roughly Rs 2,000 crore and would be operated by financial institutions, he said.

A paper would soon be sent to the Cabinet on reviving the NTC. The basis of this plan is the revival of only 34 viable mills out of the NTC's total of 119 now before theBIFR, he added.

The present NTC voluntary retirement scheme is for those with 30 years of service and revolves around paying 35 days' wages for each year of work. The Gujarat model which the government is now looking to is based on paying 25 days' wages for each year of service and 10 days' of wages for each year of remaining service.

The textiles secretary said the 1995 revival package of Rs 2,500 crore had floundered on the Maharashtra government refusing to dispose of the mills' land.

Speaking of textiles exports, the secretary said while textiles exports had fallen by about six per cent in April-July this year, in August they grew by 13.6 per cent in dollar terms.

Between April and August, garment exports grew by nine per cent, promising better prospects for textiles exports. Garment exports make up over 40 per cent of textiles exports and textiles constitute about 30 per cent of India's total exports.