Plan Com at loggerheads with Textile Ministry

NEW DELHI: After opposing the extension of Technology Upgradation Fund Scheme (TUFS), the Planning Commission has objected to the textile ministry's proposal for providing financial assistance to textile firms for imports of second-hand machinery.

���The Planning Commission is apprehensive that importing almost 15-year-old machinery would make India a junkyard,��� textiles ministry joint secretary Sudripta Roy said at an industry seminar here on Thursday. The textile ministry has earlier proposed to extend the 5% interest waiver under TUFS to firms purchasing old machinery from abroad.

Mr Roy said though his ministry was trying hard to convince the Planning Commission about utility of the Technology Upgradation Fund Scheme (TUFS), the plan panel has raised concerns stating continuation of subsidised imports of old machinery could become even a WTO issue. Extending TUFS to imports of old machinery could also be against the WTO norms, he said at a seminar organised by the Confederation of Indian Textile Industry.

With few companies producing textile machinery, presently India imports most of machinery from Europe or America. According to analysts, imported machinery is twice as costly as the Indian machinery. So the textile ministry had planned to promote the import of second-hand machinery, which is affordable.

The proposed interest waiver was expected to make it lucrative for domestic firms willing to import used machines and equipment. But the Planning Commission feels that such assistance will bring-in obsolete technology in India.

Analysts believe that since textile machinery; spindles for instance, has a life span of about 25 years, it makes sense to import old machinery at a cheaper cost. India is already a major importer of textile machinery from Europe and America. Surpassing Turkey and China, India has become the largest importer of Swiss textile machines in the current year. (ends)