By IANS,
New Delhi: The government Thursday said it will release a subsidy of Rs.2,546 crore ($535 million) for the crisis-hit textile sector, which will directly reach the beneficiaries in three days.
“The fund will reach 12,540 beneficiaries through 121 financial institutional banks,” Textiles Minister Dayanidhi Maran told reporters, adding that amount will be released in three days.
“This is for the first time that such a large amount of subsidy has been released in a single tranche and the amount will be credited to the bank accounts of beneficiaries in the record time of 72 hours (three working days),” the minister said.
In India’s annual budget presented last month, the government allocated Rs.3,140 crore for the Technology Upgradation Fund Scheme (TUFS) for textile firms. The subsidy will be released from this fund.
Finance Minister Pranab Mukherjee had also raised the planned allocation for the textile sector to Rs.4,500 crore for the current fiscal from Rs.4,090 crore the year before.
Maran said that the beneficiaries would get 10 percent capital subsidy for the machinery they had purchased.
He added that a committee has been set up to formulate a national fibre policy and it would submit its recommendations in three months.
Meanwhile, industry leaders welcomed the government’s decision, saying the subsidy would “greatly help” the textile sector.
“This amount of subsidy is indeed significant and would greatly help the Indian textile sector at a time when the industry is finding it difficult to procure credit for its working capital needs,” said Harsh Pati Singhania, president of the Federation of Indian Chambers of Commerce and Industry (FICCI).
Many textile companies have reported that banks were still reluctant to lend to textile companies,” he added.
The country’s textile sector is facing one of its worst crises as business orders from the advanced economies like the US and Europe fell sharply due to the global slowdown.
According to the Apparel Export Promotion Council (AEPC), India’s garment exports fell 15.4 percent in the first quarter this fiscal.