Book English 2011.p65 - Ministry of Textiles

ministry of textilesii)iii)iv)The extent of increase however variesacross segments and acrosscompanies in each segment;The productivity improvement mustbe seen in the context of the varyinglevels of technology prevalent in eachsegment in the pre-TUFS period.The spinning sector was relativelymodernized even during the pre-TUFS period primarily on account ofthe presence of a strong domestictechnological base. Incrementalimprovements have been achievedprimarily through investments in highspeedmachines;There is however quite a distance tocatch up in areas like weaving andknitting;Interest rates in competing countries,especially in China, were quite low inthe past when compared to India.While interest rates in Pakistan andVietnam have witnessed a sharpincrease in the last few years whencompared to India, interest rates inChina continue to be low. The interestsubsidy has helped lower the effectiveinterest cost for companies;v) High fragmentation in garmenting andinadequate availability of good qualityprocessed fabrics have resulted inIndia losing out on the growthopportunities.The evaluation study has recommendedthat in view of the positive impact of TUFSin terms of increase in productivity, quality,value realization, turnover and reductionin cost etc, the scheme should becontinued into the 12th Plan Period topromote further investments in the sector.The evaluation study has further estimatedthat the industry needs an investment ofRs. 54000 crores by 2011-12 and anadditional investment of Rs. 1,45,000crores in the 12th Plan Period to cater todemand growth.Proposal to enhance and modify TUFSCurrently, a proposal to enhance the 11thPlan allocation under TUFS from Rs.8000 crore to Rs. 15404 crore is underconsideration. The proposal alsoenvisages modifications in the scheme toensure focus of interventions on hithertoslow growing sectors like weaving,encouragement to forward integration andtighter administrative controls andmonitoring of the scheme. The proposedmodifications are expected to triggeradditional investments of over Rs. 46,900crore during the balance period of the11th Five Year Plan.HANK YARN OBLIGATION SCHEMEThe Hank Yarn Obligation (HYO) is astatutory obligation which enjoins uponspinning mills to pack yarn in hank form.This Scheme is meant for protection ofthe handloom industry by way of ensuringthat the yarn in hank form is available inadequate quantity at reasonable prices tothe handloom industry. Failure to complywith this Obligation invites lodging of FIRagainst the defaulting mills by the Officeof the Textile Commissioner. The currentlevel of obligation is 40% of the total yarnpacked by the mills for civil consumption.The obligation has to be fulfilled in quarterlyperiods commencing from January-March.The Scheme also provides that shortfall infulfillment of the obligation may be met bytransferring of the obligation to anothermill which has excess production of hankyarn in addition to fulfilling its ownobligation. Normally, mills accept suchtransfer on premium.With the strict enforcement of theprovisions of the Hank Yarn PackingNotification by the Office of the TextileCommissioner, Mumbai, it is ensured thatactual packing of Hank Yarn is sufficientto meet the total domestic requirement ofhank yarn in the country. The details ofHank Yarn Packing Obligation and its36