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Govt restructures textile tech upgrade scheme

02 May 2011 Evaluate

The Centre has announced a restructuring of the popular Technology Upgradation Fund Scheme (TUFS).As against the main objective of the present scheme to leverage investments in technology upgradation in the textile sector, the revamped Scheme aims to specifically address the issues of fragmentation and promote forward integration across the value chain, encouraging investments in sectors with low investment such as processing and reducing the repayment period.

Under the Restructured Technology Upgradation Fund Scheme, an overall subsidy cap of Rs 1,972 crore has been announced for the period April 28, 2011 to March 31, 2012, the Textile Commissioner's office said in a statement quoting a Government Resolution issued by the Ministry of Textiles. The Resolution lays down the financial and operational parameters and implementation mechanism for the Restructured TUFS.

The financial and operational parameters of the restructured TUFS in respect of loans sanctioned include a reimbursement of 5 per cent on the interest charged by the lending agency and an additional option to power loom units and independent preparatory units to avail themselves of 20 per cent margin money subsidy on capital ceiling of Rs 5 crore.

Interest reimbursement of 5 per cent plus 10 per cent capital subsidy for specified processing, garmenting and technical textile machinery, 25 per cent capital subsidy in lieu of 5 per cent interest reimbursement on purchase of new machinery and equipment, scheme to cover only automatic shuttle less looms of 10 years vintage and with a residual life of minimum 10 years has been proposed.

There will be an overall subsidy cap of Rs 1,972 crore from the date of the Government Resolution to March 31, 2012, which is expected to leverage an investment of Rs 46,900 crore with sectoral investment shares of 26 per cent for spinning, 13 per cent for weaving, 21 per cent for processing, 8 per cent for garmenting and 32 per cent for fabrics.

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