Welcoming the five per cent interest subsidy announced in the TUF, he urged the government to earmark part of the amount to disorganised powerloom sector running with age-old technology.

Mathivanan urged the centre to release the fund through commercial and cooperative banks along with financial institutions with relaxed conditions so that small units could also have access to the fund.

He also exhorted to government to take steps to ban the raw cotton export, to keep the cotton yarn price competitive.

Mathivanan said the PDEXCIL would act as a nodal agency in identifying the powerloom units and helping in disbursement of loans. The government decision to exclude stand-alone spinning units for benefits underthe Rs 25,000 crore technology upgradation fund (TUF) for the textile industry to be launched from April one next, has come in for sharp criticism from the industry, especially spinning units.

"In spite of persistence and several pleas to include stand-alone spinning units in the technology upgradation fund (TUF) government has not heeded the industry's request," the Indian Cotton Mills Federation (ICMF), an apex body of textile mills, said in a statement.

"No doubt under the erstwhile Textile Modernisation Fund Scheme of 1986, spinning industry had availed of loans in greater measure for modernisation of their equipment. However, there have been tremendous technological changes since 1986 and therefore, spinning sector is essential for sustenance and export efforts of downstream sectors for manufacture of fabrics, madeups and garments," ICMF chairman Sudhir Thackersey, who otherwise welcomed TUF, said.

Government on Wednesday decided to set up TUF after the cabinet committee on economic affairs clearedit. Textiles minister Kashiram Rana, while announcing the decision, said stand-alone spinning units had been excluded from TUF as they had benefitted from an earlier Rs 750 crore scheme during 1986-1991. However, spinning units forming part of composite mills would be eligible for TUF.