Textiles Sector has been identified as one of the priority sectors having high growth potential and higher multiplier effects for employment generation. Timely policy intervention can boost the competitiveness of this sector manifold, as the growth impetus prevailing in the sector is vibrant. Textile and Clothing industry plays a dominant role in the country's economy and has a prominent position in the textile world. It has a total market size of US $52 billion and accounts for 26% of the manufacturing sector, 20% of industrial production and 18% of industrial employment. It contributes 15% to gross export earnings and 4% to national GDP. It provides direct employment to about 35 million persons. Besides, another 50 million people are engaged in allied activities. Market size potential for the industry is envisaged at USD 115 bn by FY 2012.

The Ministry of Textiles has announced two flagship schemes namely the Technology Upgradation Fund Scheme (TUFS) and the Scheme for Integrated Textile Parks (SITP) have been approved for continuation in the Eleventh Five Year Plan. These schemes not only provide environment conducive to the growth of this sector but also enable the industry to expand and modernize its capacity.

Technology Upgradation Fund Scheme (TUFS) - the garmenting, technical textiles and processing segments of the textiles industry have great potential to add value and generate employment. The Working Group on Textiles and Jute Industry for the XI Five Year Plan, constituted by the Planning Commission, has set a growth rate of 16% for the sector, projecting an investment of Rs. 150,600 crore in the Plan period.

However, before this happens a substantial effort will have to go into improving the quality of craftsmanship and also the loom capabilities.

In this context, it was decided to extend the Technology Upgradation Fund Scheme during the Eleventh Plan period, and to reframe some of the financial and operational parameters of the Scheme in respect of new loans. The modified techno-financial parameters of the Scheme are expected to infuse capital investment into the textiles sector, and help it capitalize on the vibrant and expanding global and domestic markets, through technology upgradation, cost effectiveness, quality production, efficiency and global competitiveness. It is estimated that this will ensure a growth rate of 16% in the sector.

The modified structure of TUFS focuses on additional capacity building, better adoption of technology, and provides for a higher level of assistance to segments that have a larger potential for growth, like garmenting, technical textiles, and processing.

With a view to provide the industry with world-class infrastructure facilities for setting up their textile units, the Scheme for Integrated Textile Park (SITP) was approved in July 2005, by merging the Apparel Park for Exports Scheme (APES) and the Textile Centres Infrastructure Development Scheme (TCIDS) to create new textiles parks of international standards at potential growth centres. Primary objective of the SITP is to facilitate setting up of textiles units with desired infrastructure facilities.

Much was expected from Mr. Chidambaram. The issue of Rupee appreciation is not bothering the textile sector only. It was therefore expected that while the Finance Minister addresses this important issue in the overall context obviously the demand of the textile sector will be taken care of. Unfortunately this has not happened.

As per target of the Tenth Five Year Plan, 30 projects have been sanctioned. Estimated project cost (for common infrastructure and common facilities) is Rs. 2,893.42 crores, of which Government of India assistance under the scheme would be Rs. 1,054.76 crores. So far, an amount of Rs. 205 crores has been released under the Scheme. 2,186 entrepreneurs are scheduled to put up their units in these parks covering an area of 3,206 acres. The estimated investment in these parks would be Rs.15,258 crores and estimated annual production would be Rs. 24,024 crores. After these Textiles Parks become functional, there will be employment generation for 5.45 lakh persons.

Taking into consideration the response to the scheme and the opportunities for the growth of textile industry in the quota free regime, the Ministry of Textiles has proposed for continuation of the scheme in the Eleventh Five Year Plan to develop 50 more textiles parks.

The Indian textile industry is in as much stronger position now than it was in the past. The industry which has been experiencing a rate of growth of 3 - 4 percent during the last six decades has suddenly jumped to 9 - 10 percent. There is a sense of optimism in the industry and textile sector has now dawned a 'sunrise' sector feeling.

In spite of all these policy initiatives, growth of this sector depends on how these benefits are utilised. Only time will say up to what extent this sector got benefited by these initiatives.

Boom and gloom are part of globalization. The rupee appreciation has caused the temporary gloom in the industry. Yet, Indian textile sector is matured enough to fight against all these odds and will be a major player in the world market.