Modernisation in India’s largest man-made fabric (MMF) sector in Surat will be affected as the textiles ministry has reduced the central fund allocation under the Amended Technology Upgradation Fund (ATUFS) scheme from Rs. 2,300 crore in 2018-19 to Rs. 700 crore in 2019-20, according to the list of proposed budget allocation in the textile sector issued by the ministry.

The textile sector in Gujarat’s Surat has been the largest beneficiary of the government subsidy, with the annual investment in state-of-the-art machinery pegged at over Rs. 3,000 crore, according to a report in a top English-language daily. As power loom weavers have been shifting to imported machinery for fabric weaving to raise increasing productivity and reduce costs, the reduction of ATUFS allocation will hamper this modernisation process.

In the proposed budget allocation, the textile ministry has decreased the overall budget of the textile sector from Rs. 6,943 crore in 2018-19 to Rs. 4,831 crore. Also, a special incentive has been offered to farmers for procuring cotton by the Cotton Corporation of India under the price support scheme worth Rs. 2,000 crore in 2019-18, which was Rs. 924 crore in the last fiscal. For the power loom sector, the ministry has allocated Rs. 150 crore for 2019-20, which was Rs. 100 crore in 2018-19.

“The allocation of Rs. 700 crore under the ATUFS for the entire country is a meagre amount. In order to boost the textile sector, government subsidy under ATUFS is needed,” said Federation of Indian Art Silk Weaving Industry chairman Bharat Gandhi.