India's trouble-hit textile sector has got a leg-up from Finance Minister P Chidambaram's budget last Thursday as he allocated sizable funds for modernisation of the power loom sector, Textile Upgradation Fund and for setting up of apparel parks.

Rising international competition, falling demand and a decline in exports have been plaguing the textile exports in recent years.

Chidambaram gave an additional sum of Rs 96 crore in the next fiscal to the textiles ministry for interest subsidy and proposed, for the first time, the setting up of apparel parks within the Integrated Textile Parks to house apparel manufacturing units.

A new scheme -- Integrated Processing Development Scheme --with an outlay of Rs 500 crore to address the environmental concerns of the textile industry was also pro-

posed in the budget.

Acknowledging that the readymade garment industry faced a crisis and required a lifeline, the finance minister decided to restore the zero excise duty route for cotton and man-made sector (spun yarn) at the yarn, fabric and garment stages.

"In the case of cotton, there will be zero duty at the fibre stage and in the case of spun yarn, there will be a duty of 12 percent at the fibre stage,” he said.

He also proposed to totally exempt handmade carpets and textile floor coverings of coir or jute from excise duty.

In more help to the handloom sector, Chidambaram proposed working capital and term-loans at a concessional interest of 6 percent which would benefit around 150,000 individual weavers and 1,800 primary cooperative societies.

He also reduced basic customs duty

on textile machinery and parts to 5 percent from 7.5 percent.

India's Apparel Export Promotion Council Chairman A Sakthivel welcomed the steps to address the concerns of readymade garments industry and said these would help boost the growth of the sector.

He said the creation of apparel parks within Scheme for Integrated Textile Parks and allocation of Rs 10 crore would go in a long way in increasing export of value-added textile chain.

The Confederation of Indian Textiles Industry welcomed the proposals terming them positive.

In a statement, CITI Chairman SV Arumugam said there had been signs of recovery in the industry for the past few months and the budget would help this process further.

Restoring the optional excise regime for branded garments and made-ups was the most positive factor in this budget, he added.