Textile sector rejoices extension of TUFS

The Technology Upgradation Fund Scheme (TUFS),

mooted by the Southern India Mills’ Association (SIMA) for the textile sector which was under operation from April 28, 2011 to March 31, 2012, has been extended for one more year. Although the extension has been decided, it is yet to be announced by the government owing to certain modifications under process in the scheme intending at addressing the fragmentation of the industry. It is believed that the modifications would help in getting more investments in the processing and weaving sectors, particularly the power loom sector. The TUF scheme was kept on hold between June 29, 2010 and April 27, 2011 seeking additional funds for the 11th Five Year Plan and hence the restructured TUF scheme was announced.

Introduced in 1999, the scheme was restructured in 2011 with an addition of Rs 1,972 crores. The decision to continue with the scheme for 2012-13 was taken during the sixth meeting of the Inter-Ministerial Steering Committee (IMSC) held in May, 2012, considering the fact that the industry had utilized only around 13 per cent of the total subsidy of Rs 1972 crores allocated for the year 2011-12.

In the last 11 years, the scheme saw an investment of over Rs 2.2 lakh crores, whereas in the 12th Five Year plan, an investment of Rs 1.44 lakh crores is projected in order to achieve 12 per cent growth in production and 15 per cent growth in exports.

S Dinakaran, Chairman, SIMA thanked the government for the efforts made by them to continue the restructured TUF Scheme in the year 2012-13 and clearing all pending subsidies of several thousand cases. He also praised state governments of Andhra Pradesh, Karnataka, Maharashtra and Gujarat for coming up with attractive textile policies to increase investments in their respective states. The UID numbers will be issued only after assessing the unutilized subsidy and sectoral caps, according to the circular.