Withdrawal of TUFS a retrograde step: AEPC

Mumbai, July 10: The decision of the Textile Ministry to withdraw technology upgradation fund scheme (TUFS) is a retrograde step and one which will considerably harm the sector, according to the Apparel Export Promotion Council (AEPC).

A Rs 100 crore disbursal of TUFS, wherein funds were available at subsidised interest rates to the textile and apparel sector, would induce about Rs 2,500 crore worth of investment in the textile sector and generate employment of almost one lakh people.

In a statement here today, AEPC Chairman Vijay Agarwal said, ''Apparel industry needs Rs 30,000 crore investment in the coming years to reach its export target of US dollar 15 billion by 2010.

And the only way possible was for the industry to expand by investing from its own sources and through debt funding. With labour and infrastructure problems hampering foreign direct investment (FDI), TUFS was a big incentive for the apparel trade to expand and modernise.'' Many apparel exporting companies had planned their future capital investments, relying on this scheme and sudden stoppage will jeoparadise all their plans. Even those funds which have been sanctioned will not be released.

''AEPC feels that this scheme should have been extended upto March 31, 2010 so that necessary boost can be provided to industry for capital investemnt. AEPC feels that the circular of stopping the TUF scheme should be withdrawn and sanctioned fund should be distributed immediately,'' Mr Agarwal added.

This regressive step will deter upgradation of technology and shall hurt the textile industry very much, especially, when in the post regime, international competition has reached fierce levels.

UNI