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Action plan under way for textile industry: Rana

G. Srinivasan

NEW DELHI, July 5

THE Centre is concerned over the declining trend in textile exports and the overall downturn in activity in the country's textile industry. A plan of action to put the industry back on the rails is being worked out.

Disclosing this to Business Line here in an informal talk, the Union Textiles Minister, Mr Kashiram Rana, said that he had ``a cordial and fruitful'' meeting with the Union Finance Minister, Mr Yashwant Sinha, on Tuesday. Essentially, the meeting took pl ace because both the Textile and the Finance Ministries were deeply disturbed over the noticeable decline in textile exports in recent months.

Mr Rana said that the Union Budget proposals for the textile industry, such as the imposition of 16 per cent excise duty on branded garments and subsequent drastic reduction in the drawback rates for textile industry had all affected the industry's growt h. These issues were brought to the attention of the Finance Minister who responded positively.

Mr Rana said that under the Technology Upgradation Fund Scheme (TUFS), there were complaints that the nodal agencies, including SIDBI, delayed the disbursement of interest subsidy to applicants. This affected the weaving and spinning segments. The Financ e Minister has assured Mr Rana that a meeting of the nodal agencies charged with the operation of the TUFs would be convened to sort this issue.

As exports remain a crucial segment of the industry, the Finance Minister has asked Mr Rana to go ahead with all expansion plans of the various Textile Ministry-funded programmes such as the setting up of an apparel export park, replacement of around 2.5 0 lakh plain looms with semi-automatic/automatic looms under the TUFs, introduction of 50,000 shuttle-less looms and the active operationalisation of the Cotton Technology Mission. The investment made in these initiatives are expected to act as a trigger to the industry, which would step up funds for accelerated manufacturing activity and attendant value addition.

For import of inputs in the modernisation of the textile industry, the Finance Ministry would accord fiscal sops depending on the importance of imported goods including capital goods and crucial raw materials and intermediates. This will help the industr y upgrade its technology and be price and quality competitive, Mr Rana noted.

He said the apparel parks would serve as a magnet to attract several garment units under one fold in the post-dereservation scenario so that the basic infrastructure and other amenities could be made available to them by the Government at a reasonable co st and assured provision.

He also said Plan expenditure for the Textile Ministry has been stepped up to Rs 650 crore in the current fiscal and additional funds are available to ensure that the existing schemes are fully implemented to effect a rebound in activity for an industry which has unfortunately been ``in the doldrums''.