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).
The cash-starved Indian textile industry is of the view that the Technology Upgradation Fund Scheme, or Tufs, flagship scheme of the textiles ministry, has lost its shine, as economic slowdown has put modernisation and expansion plans of companies on hold. The industry says there are more basic problems that the government needs to address.
Grant to help the industry clear its dues up to June 30. Under the scheme, the government provides 5 per cent subsidy to industries for modernisation and installation of new upgraded machinery. The fund would be transferred electronically to more than 121 financial institutions and will help 12,514 beneficiaries.
The government on Sunday announced a package of Rs 1,400 crore (Rs 14 billion) under the Technology Upgradation Fund Scheme and 2 per cent interest subsidy up to March 31 next year. But the textile industry had demanded 4 per cent interest subsidy along with reintroduction of the duty drawback scheme.
Rs 1,400 crore provided in the stimulus package was due under TUFS anyway.
The industry, which has complained of widespread job losses along with a sharp decline of about 30 per cent in its expected export target for the current fiscal, wants a quick action from the government. Industry sources say that even if the government releases the funds, the banks would take another month to disburse them.
In order to modernise the Indian textile industry, the finance minister has increased the allocation to the Technology Upgradation Fund Scheme (TUFS) by 188 per cent to Rs 3,140 crore (Rs 31.40 billion) for 2009-10 as against Rs 1,090 crore (Rs 10.90 billion) for the corresponding period last year.
Textile exports are likely to touch $50 billion by 2010, Union Minister for Textiles Kanshiram Rana announced.
Rising skills gap, falling exports, low productivity, rising debt and low foreign investment is jeopardising the target set for the textile and apparels sector
It emphasised that agricultural infrastructure needs considerable investments and hence Section 80IA benefits must be extended to all such investments like IT infrastructure, computers, VSAT, solar panels, water harvesting facilities, storage etc.
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