Issues related to the textiles sector and an increase in allocation of funds under Technology Upgradation Fund Scheme and interest subvention for exporters was discussed by representatives from a FICCI panel recently, with Finance Minister Arun Jaitley. FICCI Textiles Committee chaired by Shishir Jaipuria, put forth a request for adequate allocation of funds under the Technology Upgradation Fund Scheme (TUFS), consideration of sanctioned loans under existing TUFS instead of proposed new scheme of TUFS, reduction in duties on man-made fibres and restoration of interest subvention for exporters.

The FICCI body also felt that India, after taking the necessary steps can attain 20 per cent growth in exports over the next 10 years, as China was vacating the space in manufacturing. The panel said that with the exports incentives been rationalised the only support for Indian textile industry was perhaps the TUFS. The budget allocation for TUFS, for 2015 though, is reduced from Rs 1,840 crores to Rs 1,520 crores, as against last year. This is inadequate and FICCI has requested the Finance Minister to consider increasing the allocation under the scheme to Rs 5,000 crores.

Also, the chamber expressed apprehension on the proposal to restructure TUFS. It stated that under the current review, term loans already sanctioned would be considered in the new scheme, and this would affect the projects that were in the pipeline. To increase competitiveness and accelerate growth of exports, FICCI wishes that export finance should be provided at 7 per cent per annum, highlighting that restoration of interest subvention will provide a boost to the fragile export growth of the textile sector.