The Hindu Business Line : Textile industry gets a fillip through TUFS

THE upbeat mood in the domestic textile fraternity is amply reflected in the industry's rapidly increasing offtake from the Technology Upgradation Fund Scheme (TUFS), launched by the Government to give a leg up to the industry in view of the textile quota phase-out from January 1, 2005.

According to industry players, the scheme is helping to bring down the interest cost for the industry as also playing a role in improving overall competitiveness.

According to Government data, the number of applications being received from the industry for loans under the scheme — through which the Government bears the cost of interest subsidy for the loans taken by the investor — has been on a steady rise over the last three years, as also the amount sanctioned for projects. The number of applications received during the last fiscal for loans under the scheme almost doubled to Rs 3,356 crore last fiscal, against the number of applications received the previous fiscal. The sanctions during the last fiscal were also up nearly 100 per cent to Rs 1,341 crore, against the the previous fiscal.

"The industry has lapped up the scheme, and the sanctions have been going up leaps and bounds and is helping the industry achieve a higher level of competitiveness. The TUFS does not fund the entire project, but only a part of it and hence the total investment in the industry is much higher than the disbursement," an industry player said. In fact, the textile and banking secretaries will soon hold a meeting with banks and FIs to devise a strategy for speeding up TUFS operations, sources said.

Till September 30 this year, banks and FIs had sanctioned loans amounting to Rs 9,051.28 crore to projects under the scheme, with a project cost of Rs 20,007 crore. Of this, Rs 7,468 crore has been disbursed for projects worth Rs 15,565 crore.