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Cotton procurement scheme extended

Our Bureau

NEW DELHI, July 11

THE Cabinet Committee on Economic Affairs (CCEA) has approved the extension of the Maharashtra Government's monopoly procurement scheme for raw cotton for a further period of five years up to June 30, 2006.

The approval was subject to the condition that there would be no financial commitment on the Union Government's part in implementing the scheme, the Parliamentary Affairs Minister, Mr Pramod Mahajan, told newspersones here on Wednesday.

This scheme was originally introduced by the Maharashtra Government in 1972-73 cotton season within the overall framework of Maharashtra Raw Cotton (Procurements, Processing and Marketing) Act, 1971.

The scheme has been extended from time-to-time on a yearly basis. But now on the request of the State Government, the Centre had decided to extend it for a five year period till June 2006, he added. Maharashtra currently has around 30 lakh cotton growers and the State accounts for roughly a fifth of the country's total cotton production.

CCEA has also decided to include cotton ginning and pressing under the Textile Ministry's Technology Uprgradation Fund (TUF) scheme with immediate effect.

Although cotton ginning and pressing was originally covered under the TUF scheme with effect from April 1, 1999, it was decided to exclude the sector following the launch of the Technology Mission on Cotton (TMC) from February 21, 2000.

According to Mr Mahajan, TMC was helpful for only small ginning and pressing units because the capital incentive was restricted to only 25 per cent of total project cost subject to a maximum of Rs 20 lakhs per unit.

On the other hand, the TUF scheme provided for five per cent interest reimbursement, which the industry found more attractive. ``The ginning and pressing sector will now have the option to avail of benefits under TUF or TMC, but not both,'' Mr Mahajan cl arified.