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Govt restructures Technology Upgradation Fund Schemes (TUFS)
May '11
The Government has restructured the Technology Upgradation Fund Scheme (TUFS) – the flagship scheme of Ministry of Textiles for upgradation of technology in the textile and jute sectors. Ministry of Textiles has issued the Government Resolution on Restructured Technology Upgradation Fund Scheme for the period 28.04.2011 to 31.03.2012 (both the days inclusive) with an overall subsidy cap of Rs.1972 crore during the period. The Government Resolution lays down the financial and operational parameters and implementation mechanism for the Restructured TUFS.

1. The objective of the present Scheme is to leverage investments in technology upgradation in the Textiles and Jute Industry, with a special emphasis on balanced development across the value chain. The major objectives of the present restructured TUFS scheme are as follows:-

(a) Address the issues of fragmentation and promote forward integration by providing 5% IR for spinning units with matching capacity in weaving/knitting/processing/ garmenting; (b) promoting investments in sectors with low investment like processing;
(c) reducing the repayment period to 7 years with 2 years moratorium to promote financial efficiency;
(d) Technology upgradation in weaving by providing higher capital subsidy for establishment of new shuttle less looms. This would help to reduce and eventually phase out secondhand looms
(e)Ensuring greater participation of SSI units by increasing the limits under this category; (f)The eligibility of restructured/ rescheduled cases to be restricted to initial loan repayment schedule and ballooning of subsidy in rescheduled cases to be avoided
(g) revamped scheme to be structured in such a way that the subsidy out go is not open ended and has a definite cap of Rs. 1972 crores.;
(h) Greater administrative and monitoring controls to be introduced with pre-authorization of all eligible claims by the Textiles Commissioner Mumbai, before approvals and intensive monitoring by the Inter Ministerial Steering Committee chaired by Secretary Textiles.

2. For loans sanctioned during 01.04.1999 to 28.06.2010, the then existing parameters and guidelines of TUFS would continue to apply. The Government has made provision of Rs.5432 crore towards committed liabilities for the cases sanctioned during the aforesaid period for the 11th Five Year Plan.

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