Indian govt modifies implementation mechanism of ATUFS

03 Aug '18

3 min read

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The ministry of textiles, Government of India, has modified the financial and operational parameters and implementation mechanism of Amended Technology Upgradation Fund Scheme (ATUFS) vide Revised Resolution dated August 2, 2018. The revised scheme would facilitate improvement in productivity, quality, etc, create more jobs and boost textile exports.

As per the revised ATUFS, the applicants who applied for UID under RRTUFS before 12.01.2016 but the UIDs could not be issued to them for non-availability of funds, will be given one-time opportunity to apply for subsidy under ATUFS. Textile Commissioner will issue a communication in this regard.

Limited Liability Partnership Firms registered under LLP Act, 2008 will also be eligible for the benefit of capital subsidy under ATUFS. Cooperative Banks will also be the lending agency under the scheme.

Specification of technology for the machinery for all the eligible segments would be prescribed annually in advance by the TAMC effective from 1st April of the year.

Textile Commissioner will constitute a Technical Committee which will assist the TAMC to prepare an indicative list of manufacturers of machinery. This Committee will meet on monthly basis to update the list of machineries and manufacturers. This list will be suggestive and not exhaustive or complete. Industry will be at liberty to purchase machinery of their own choice conforming to the specified technology parameters subject to inclusion in the indicative list of manufacturers by the TAMC.

Accessories, attachments, sample machines and spares procured from other manufacturers enlisted in the indicative list will also be eligible for subsidy up to a value of 20 per cent of basic cost of machinery.

Unique Identification Number (UID) has been defined as provisional approval for estimated Capital Investment Subsidy based on the tentative estimates of specified machineries for technology upgradation.

The revised ATUFS also has a clause that except in case of merger, acquisition, amalgamation or takeover of the entity, the plant and machinery purchased with subsidy under TUFS shall not be disposed of before 10 years of the date of purchase without prior approval of the Textile Commissioner.

Moreover, the entity will be required to furnish a declaration of the subsidy availed by it under RRTUFS and ATUFS.

Further, advance payment up to the limit of his own share in the machine cost can be made by the applicant prior to the date of sanction of the term loan.

For ATUFS, purchase date shall be date when full and final payment is made by the entity for machinery. In addition to the ATUFS benefits, textile units would be permitted to avail benefits of the state government’s schemes.

Commenting on the announcement, The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) chairman Narain Aggarwal said the amended scheme would encourage investment in the man-made fibre (MMF) textile segment and give a boost to ‘Make in India’ and ‘Zero effect’ and ‘Zero defect’ initiatives of the government.

“This will also help in more employment generation and boost exports in the textile sector. This revised scheme would also facilitate improvement in productivity, quality, etc. in the textile industry,” Aggarwal said.

ATUFS was launched in January 2016 for a period of seven years in place of the erstwhile Technology Upgradation Fund Scheme (TUFS). The government provides credit linked subsidy under the scheme. (RKS)

Fibre2Fashion News Desk – India

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