TUF may be reintroduced

Textile Commissioner A B Joshi, has revealed that the termination of the Technology Upgradation

Fund (TUF) Scheme in June last year was for the sake of reviewing the present structure, and that the government is expected to restore the scheme, shortly. He said this at a recent seminar where major players of India’s textile industry were in attendance. Discontinuation of the fund has badly hit many textile units, and thus the government was called upon to reintroduce the same. It is expected that the scheme aimed at up-gradation of textile units in may soon be restored in a renewed form.

The TUF scheme mainly provides for reimbursement of the five per cent interest charged by financial institutions and banks for technology up-gradation projects in conformity with the scheme. However, the rate of interest reimbursement on spinning machinery has been reduced to four per cent. In addition, the scheme provides coverage of exchange rate erosion not exceeding five per cent points per annum with respect to forex loans instead of five per cent interest support. It provides an additional option to power loom units to avail of 20 per cent margin money subsidy under TUFs in lieu of 5 per cent interest reimbursement on investment in TUF compatible specified machinery subject to a capital ceiling of Rs 200 lakh and ceiling on subsidy Rs20 lakh. It also provides 15 per cent margin money subsidy for SSI textile and jute sector in lieu of 5 per cent interest reimbursement on investment in TUF compatible specified machinery subject to a capital ceiling of Rs 200 lakh and ceiling on subsidy Rs 15 lakh.

The scheme provides 5 per cent interest reimbursement plus 10 per cent capital subsidy for specified processing machinery, garmenting machinery and machinery required in manufacture of technical textiles. The scheme provides 25 per cent capital subsidy on purchase of the new machinery and equipments for the pre-loom and post-loom operations, handlooms/up-gradation of handlooms and testing and quality control equipments, for handloom production units. The scheme also provides interest subsidy/capital subsidy/margin money subsidy only on the basic value of the machineries.