In a bid to give a leg-up to the textiles industry in the post-quota regime, the government on Monday rolled out a slew of measures for the sector, including a 10 per cent capital subsidy scheme, de-reservation of 30 items from SSI and reduction in duty on machinery and yarns.

Reaffirming the government's commitment to the sector, Finance Minister P Chidambaram said, "The government will continue to nurture the textile sector which has huge potential for employment and exports".

Tabling the Union Budget for 2005-06, he said the sector was witnessing a new vigour after the quotas were eliminated on January 1, 2005, and investment was estimated to go up to Rs 30,000 crore (Rs 300 billion) from Rs 20,000 crore (Rs 200 billion) in 2004-05.

Besides raising the allocation of technology upgradation fund by Rs 435 crore (Rs 4.35 billion), he announced a 10 per cent capital subsidy scheme of 10 per cent for textile processing sector. This is in addition to normal benefits under TUF Scheme.

In order to help the industry acquire a competitive edge, customs duty on textile machinery is being proposed to be halved from the earlier 20 per cent and 30 textiles items, including hosiery, are being de-reserved from the small scale list.