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Govt gears up to resume TUFS to boost textile units

22
Jan '11
The Union Government is gearing up to resume its Technology Upgradation Fund Scheme (TUFS) in order to give a boost to the textile industry.

TUFS had been introduced by the Ministry of Textiles in 1999 to enhance investment in the textile industries. Initially, it was decided that the scheme would continue till 2007 but it was extended till 2012 by the government due to the recognition and popularity it had earned.

The domestic textile units had been demanding for the extension of the scheme in order to continuously upgrade the plants and their machines and equipment so that they can compete with the countries of China, Vietnam and Bangladesh. Rs 26.3138 billion had been already sanctioned during 2008-09 whereas Rs 28.9 billion had been approved in 2009-10 under the scheme.

The Union Budget for the current fiscal year had allocated Rs 22.675 billion. Of this, about Rs 15 billion had been approved in the first quarter of 2010-11. However, in June 2010, the Government of India had suddenly urged the banks to shelve further approvals under the Technology Upgradation Fund Scheme till further fund allocations are sanctioned by the Cabinet Committee on Economic Affairs (CCEA).

TUFS also extends the opportunity for reimbursing 5 percent of the interest that is charged by the institutions which lends the capital for investment purpose. IDBI, Small Industries Development Bank of India, IFCI and other nationalized banks are the nodal institutions which sanction the fund to the textile and jute factories for the purpose of upgradation and modernization.

The Union Cabinet is likely to give its final nod to resume the scheme, which is expected to restart towards the end of this month. This was revealed by Textiles Secretary, Ms Rita Menon while attending a meeting organized by FICCI and Textile Ministry.

Fibre2fashion News Desk - India


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