The government is likely to extend Technology Upgradation Fund Scheme (TUFS) to textile machinery sector. This is in order to facilitate a speedy modernisation and upgrade of the Rs 3,800-crore segment.
Under the scheme, a credit-linked capital and interest reimbursement scheme will be introduced.
Similarly, the excise and customs duty structure may be rationalised, making it feasible to source machinery inputs at a lower price so that machines can be offered at competitive price
?A working group constituted by the textile ministry has submitted its recommendations which will be forwarded to the finance ministry soon?? a senior official in the textile ministry told FE.
The expert group is of the view that the capacity utilisation factor of the textile engineering sector is fairly moderate and capacities are available for manufacturing more, however, there is a need to develop new technologies either indigenously or through imports in order to improve capacity utilization further and meet the increasing demand. It clearly indicates that the segment needs government support for bringing in new technology into the country and manufacturing hi-tech textile machinery domestically.
The initiative will also result in capacity augmentation, leading to higher work order, employment and overall uplift of the industry. It is interesting to note that there has been significant growth in production over the last three years.
The segment has increased its production to Rs 2,212 crore during 2005-06, from Rs 1,685 crore in 2004-05, recording an increase of 31 % and capacity utilization of 63 %. The trend has been maintained during 2006-07.