Government on Monday came out with fresh guidelines to disburse Rs 1,972 crore (Rs 19.72 billion) during the period April 28, 2011 and March 31, 2012, to the textile industry under Technology Upgradation Fund Scheme (TUFS).
TUFS is the flagship interest subsidy scheme of the Textiles Ministry for upgradation of technology and boost the textile and jute sectors.
The ministry said the additional interest subsidy of Rs 1,972 crore (Rs 19.72 billion) would help in attracting new investments worth Rs 46,900 crore (Rs 46.9 billion) in these sectors.
Under the financial and operational parameters of the restructured TUFS, brand new shuttleless looms can avail the benefit of 5 per cent interest reimbursement plus 10 per cent capital subsidy, an official statement said.
"The scheme will cover only automatic shuttleless looms of 10 years' vintage and with a residual life of minimum 10 years," it said.
Investments like factory building, pre-operative expenses will be eligible for benefit of reimbursement under the scheme meant for apparel sector and handloom, it said.
For spinning machinery, the scheme would provide 4 per cent interest subsidy for new stand alone and 5 per cent for spinning units with matching capacity in weaving, knitting, processing and garmenting.
It would also cover foreign exchange rate fluctuation. The ministry also said that the Common Effluent Treatment Plant and other investments like, energy saving devices, in-house R&D and electrical installations will not be eligible under restructured TUFS.
Further, it said that interest reimbursement will be for a period of 7 years.
During March end, the government has decided to enhance subsidy allocation for modernisation of the textiles industry to Rs 15,404 crore (Rs 154.04 billion) from the earlier sanction of Rs 8,000 crore (Rs 80 billion) for the current Plan ending 2012.
The decision to increase the outlay and re-structure the Technology Upgradation Fund (TUF) was taken by the Cabinet Committee on Economic Affairs.
Of the additional Rs 7,404 crore (Rs 74.04 billion), Rs 1,972 crore (Rs 19.72 billion) would be available for fresh sanctions while the remaining Rs 5,432 crore (Rs 54.32 billion) is meant for fulfilling the committed liabilities under the TUFS.
