Rigid labour laws dog textile sector

New Delhi: The competitiveness of the textiles sector continues to be hampered by rigidities in labour laws, ageing machinery and infrastructure bottlenecks such as inadequate power supply and port facilities, the Economic Survey has said.

The survey noted that the textile sector's performance continues to 'lag substantially behind China even in the post-quota era.'

Textile units have been demanding labour law relaxations and allowing contract labour for a minimum period without the compulsion to absorb them permanently.

The Technology Upgradation Fund Scheme (TUFS), a Central scheme that offers 5 per cent interest subsidy for expanding textile firms, and another scheme to set up integrated textile parks should address some of these problems, the survey said.

Loans worth Rs 14,901 crore have been sanctioned to 6,739 applicants under the TUF scheme since 1999, it said.

Under the Scheme for Integrated Textile Park (SITP) launched in the last fiscal to develop 25 integrated textile parks, project proposals worth Rs 2,411 crore have been sanctioned, the survey said.

These projects are likely to be completed by March 2008.