The panel of FICCI Textiles Committee chaired by Shishir Jaipuria met the Finance Minister Arun Jaitley on Saturday to discuss issues related to the textiles sector and pitched increase in allocation of funds under Technology Upgradation Fund Scheme (TUFS) and interest subvention for exporters. FICCI through this meeting has tried to bring to the fore some important issues of pressing concern to the industry in front of the Government.

FICCI has requested the Finance Minister for adequate allocation of funds under the TUFS, consideration of sanctioned loans under the existing TUFS instead of proposed new scheme of TUFS, reduction in duties on man-made fibres and restoration of interest subvention for exporters.

FICCI also said that looking at the global scenario where China is vacating space in manufacturing, there was no reason why India, provided it takes the necessary steps, cannot achieve 20 per cent growth in exports over the next decade.

To enable the Indian textiles industry to achieve the desired growth, FICCI pointed out that TUFS has been very helpful in promoting investments in the textiles sector. With the exports incentives been rationalised the only support for Indian Textile industry is the TUFS perhaps.

However, for the current year, the budget allocation for TUFS has been reduced as against last year from Rs.1,840 crore to Rs.1,520 crore. This is grossly inadequate for the sector given the pending and future demands of the industry. They requested the Finance Minister to consider increasing the allocation under the scheme to Rs.5,000 crore.

Moreover, on the proposal to restructure TUFS, the chamber expressed apprehension saying that under the current review of the TUFS term loans already sanctioned would be considered in the new scheme. This would affect the projects that are in pipeline.

FICCI, therefore, requested that the new scheme whenever formulated and ready for launch should be applicable for new proposals received by the banks thereafter and all sanctioned term loans should be considered under the guidelines of existing TUFS scheme, it said.

Regarding interest subvention, it said that to increase the competitiveness and accelerate the growth of exports, export finance should be provided at 7 percent per annum, highlighting that restoration of interest subvention will provide boost to the fragile export growth of textile sector.

In its representation submitted to Mr. Jaitley, FICCI also pitched to reduce excise duty on man-made fibres to 8 percent from the current 12.5 percent to reduce the huge gap between man-made fibres and cotton.

FICCI said that out that the revenue loss on this account would be made up with increased consumption as witnessed in 2008-09 when the excise duty on man-made fibres was 4 percent. The chamber said that the new National Textiles Policy should be announced as soon as possible.