Finance Minister Arun Jaitley meeting with a FICCI Textiles Committee delegation. (Press Trust of India)
Representatives from a FICCI panel today met Finance Minister Arun Jaitley on issues related to the textiles sector and pitched increase in allocation of funds under Technology Upgradation Fund Scheme and interest subvention for exporters.
The FICCI Textiles Committee chaired by Shishir Jaipuria "requested the Finance Minister for adequate allocation of funds under the Technology Upgradation Fund Scheme (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," the industry body stated.
FICCI also said that looking at the global scenario where China is vacating space in manufacturing, there is 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 through this meeting has tried to bring to the fore some important issues of pressing concern to the industry in front of the Government," it said.
Pointing out that TUFS has been very helpful in promoting investments in the textiles sector,
FICCI said: "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. We 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 per cent per annum, highlighting that restoration of interest subvention will provide boost to the fragile export growth of textile sector.
The chamber said the new National Textiles Policy, which aims to achieve $300 billion exports by 2024-25 and envisages creation of additional 35 million jobs, should be announced as soon as possible.
In its representation submitted to Mr Jaitley, FICCI also pitched to reduce excise duty on man-made fibres to 8 per cent from the current 12.5 per cent to reduce the huge gap between man-made fibres and cotton.
"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 four per cent," it said.