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Exclude synthetic fibre sector from TUFS - CITI
23 Apr '07
2 min read
Government has recently announced that the Technology Upgradation Fund Scheme (TUFS) will be extended to synthetic fibre manufacturers.
For the 11th Five Year Plan, Government has allocated just Rs911 crore for TUFS, which is in first place insufficient and will now be shared by fibre biggies like Reliance Industries Limited, Grasim Industries Ltd and Indo Rama Synthetics Ltd.
Shekhar Agarwal, Chairman, Confederation of Indian Textile Industry (CITI) has written a letter to the Finance Mistry informing that “TUFS assistance for the year 2006-07 has not been disbursed by most of the financial institutions and banks. While some lenders have made some reimbursements for the 1st quarter i.e. April - June 2006, almost the entire reimbursement is pending for the subsequent three quarters of the last financial year. This backlog is likely to be over Rs1,000 crore.”
“The allocation of Rs911 crore for 2007-08 is not sufficient to meet even the backlog of 2006-07. The requirement of TUFS assistance for 2007-08 against loans sanctioned in the earlier years will also be over Rs1,000 crore. Thus an additional allocation of over Rs1,100 crore will be required to ensure that the scheme operates smoothly during the current year,” notes the letter.
In such situation, he expressed surprise at Government's approval to include synthetic fibre industry, which majorly comprises of profit making giants.
Agarwal views that “The fund requirements for the synthetic fibre industry would be huge and if these are to be sourced from the frugal allocation made for TUFS for the current year, the textile and clothing industry, will find it extremely difficult to get proper assistance under the Scheme.”
For the 11th Five Year Plan, Government has allocated just Rs911 crore for TUFS, which is in first place insufficient and will now be shared by fibre biggies like Reliance Industries Limited, Grasim Industries Ltd and Indo Rama Synthetics Ltd.
Shekhar Agarwal, Chairman, Confederation of Indian Textile Industry (CITI) has written a letter to the Finance Mistry informing that “TUFS assistance for the year 2006-07 has not been disbursed by most of the financial institutions and banks. While some lenders have made some reimbursements for the 1st quarter i.e. April - June 2006, almost the entire reimbursement is pending for the subsequent three quarters of the last financial year. This backlog is likely to be over Rs1,000 crore.”
“The allocation of Rs911 crore for 2007-08 is not sufficient to meet even the backlog of 2006-07. The requirement of TUFS assistance for 2007-08 against loans sanctioned in the earlier years will also be over Rs1,000 crore. Thus an additional allocation of over Rs1,100 crore will be required to ensure that the scheme operates smoothly during the current year,” notes the letter.
In such situation, he expressed surprise at Government's approval to include synthetic fibre industry, which majorly comprises of profit making giants.
Agarwal views that “The fund requirements for the synthetic fibre industry would be huge and if these are to be sourced from the frugal allocation made for TUFS for the current year, the textile and clothing industry, will find it extremely difficult to get proper assistance under the Scheme.”
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