Industry body Confederation of Indian Textile Industry (CITI) on Friday welcomed the government's decision to extend the Technology Upgradation Fund Scheme (TUFS) to the 11th Five Year Plan.

In a statement issued here, CITI Chairman P D Patodia said, “The upfront capital subsidy of 10 per cent extended to the apparel and technical textile segments in addition to a five per cent interest reimbursement will encourage the potential and important segments of the industry to establish large production facilities to achieve economies of scale.”

On Thursday the government announced continuation of the TUFS, which will give a slew of additional sops, including interest and capital subsidy, for the textile industry. TUFS will remain in force for the entire period of the 11th Five-Year Plan and enable an investment of Rs 150,600 crore in the textile industry in the next five years, an official statement said.

Under the scheme, the industry is given four per cent interest reimbursement for spinning machinery, five per cent interest refund for other sectors and 10 per cent capital subsidy. Besides, margin money subsidy at 20 per cent to powerloom units would also be given. With the clearance of the scheme by the government, the investment momentum and the textile machinery industry will also be able to improve their capacity utilisation, Mr Patodia said.

However, for relief in the context of the rupee appreciation and interest escalation, it will be necessary to reimburse the state duties and make packing credit available at 6 per cent, he added.