New Delhi, Aug 3 (Inditop.com) Though the overall economy has started showing signals of an early recovery, the country’s textile sector, the second largest employment provider, is still struggling with the slowdown, an industry report said Monday.

The report by the Associated Chambers of Commerce and Industry (Assocham) said decline in textile exports and massive layoffs in the industry were still continuing.

According to official data, the textile sector provides employment to about 91 million people, second highest figure after the agriculture sector, and contributes about 13 percent to the total export earning and 4 percent to the gross domestic product (GDP).

Releasing the study, “India Textile Scenario”, Assocham president Sajjan Jindal said about one million jobs were lost in last few months as orders from the recession-hit markets like Europe and the US fell.

Textile exports during April-March registered a decline of 1.71 percent to $21.75 billion as compared to $22.13 billion in the like period last year.

Among the maximum hit segments, handicrafts registered a decline of 48.35 percent in 2008-09 at $1.79 billion as against $3.48 billion in 2007-08.

The textile industry could attract only Rs.49,613 crore ($10.4 billion) investments last fiscal, down from Rs.90,369 crore in 2006-07.

The sector still suffers from high power cost and lack of power supply, the report said.

It added that state governments should offer power at low cost for new investments made in the textile industry.

Assocham further recommended that the government should increase funds under the Technology Upgradation Fund Scheme (TUFS) for textile firms from Rs.3,140 crore now to Rs.4,500 crore.

The fund can be used to clear the existing backlog of subsidy payments and upgrade technology of textile units, it added.