The Hindu Business Line : Qualifying dyeing machinery — Ambiguity in TUFS list delays processing of loans

The banker is unable to decide in the absence of clarification as to whether `soft-flow' dyeing machinery is qualified as advanced processing machinery permitted for the higher capital subsidy of 10 per cent under the TUFS.

Coimbatore , May 31

THE specified machinery norm prescribed for a higher capital subsidy dispensation for textile producers investing on modern processing houses under the technology upgradation fund scheme (TUFS) has hamstrung the clearance of term loans by the lending institutions.

The omission of some of the new generation dyeing machinery in the list of the specified processing machinery prescribed by the Ministry of Textiles that are entitled to an additional 10 per cent capital subsidy over and above the usual five per cent interest subsidy generally allowed under the TUFS has forced the lending agencies processing the loan application undecided on clearing the new investment proposals, the Tirupur-based garment industry sources said.

At least a few investment proposals presented recently to the SIDBI, in which the project promoters have sought to invest on `soft-flow' dyeing machines, the new generation capital equipment preferred widely by the Tirupur-based processing houses, are pending with the lender. The banker is unable to decide in the absence of clarification as to whether `soft-flow' dyeing machinery is qualified as advanced processing machinery permitted for the higher capital subsidy of 10 per cent under the TUFS.

The same is the case, the sources said, with other financial institutions having TUFS accounts that are confronted with ambiguity in deciding the qualifying machinery for the subsidy.

Many dyeing houses in Tirupur have of late preferred to install `soft-flow' dyeing system discarding the conventional winch dyeing system, primarily to save on power and the water consumed for fabric/yarn processing (the latter has especially a bearing on minimising the effluent load), though the initial investment for the `soft-flow' dyeing line is said to be in the Rs 60-70 lakh range.

There has also been a thinking among the knitwear processing industry, according to sources, that the list of processing equipment prescribed by the Textiles Ministry for the 10 per cent capital subsidy whose operational guidelines were issued last month consists by and large the system-machinery and thus failed to accommodate the unit-specific machinery needs which have greater locational relevance and advantage.

The sources told Business Line that with Tirupur-based wet processing units gearing up for larger investments to modernise their production lines, there has been substantial demand for new generation dyeing and textile finishing machinery and among the much sought-after processing equipments are the compacting and the soft-flow dyeing machinery.

Of the 500-odd active dyeing units in the region, already 150 or more processing houses have opted for the `soft-flow' dyeing equipment.

To buttress the local dyeing units claim for rationalising the list of processing equipment that could be allowed to benefit from the higher capital subsidy, the Tirupur Exporters Association has represented to technical advisory and monitoring committee for the TUFS and the Centre for removing the anomalies.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page