The Apparel Export Promotion Council (AEPC) has asked the government to raise interest subsidy under the Technology Upgradation Fund Scheme (TUFS) for processors and garment industry from 5 to 8 percent. At the same time, AEPC Chairman, Premal Udani, expressed in a letter to V. Srinivas, Joint Secretary for Exports at the Ministry of Textiles that capital subsidy should be raised from 10 to 15 percent.
“Processors have to spend a large amount of money for environmental complainces”, said Udani. “Machineries bought for this do not add to the turnover and are tremendously expensive. We therefore propose for that all machineries which help reduce water and air pollution, like effluent treatment plants, a special additional capital subsidy of 10 per cent should be given."
Buildings for garment units are considered at 50 percent which should be raised to 100 per cent, stated Udani, as modern factories need to be housed in proper buildings which conform to all standards of compliance. The garments and made-up segments of the industry create millions of jobs and also have maximum value addition.
"We hope the new TUF policy recognises the importance of these sectors and will be attractive enough to make large investments," said the AEPC chairman, adding that with the tremendous spurt in domestic markets as well as the government`s encouragement to the value-added sector, there is renewed interest by the garment to invest into capacity building.
Udani said the TUFS has immensely helped certain segments of the industry to modernise but unfortunately the development has been lopsided. Spinning and, to some extent, weaving mills have taken great advantage of the scheme but not the processing and garmenting units, mainly because of uncertainty of government support vis-a-vis raw material export.
It is much easier and hassle-free to export yarn and grey fabrics compared to processed fabrics and garments. Udani added that the textile chain needs to be balanced as eventually the entire industry must be modern and up to world standards.