The Hindu Business Line : New tech fund scheme for textiles by May

Coimbatore April 6 Textile accounts eagerly looking for the re-start of the technology upgradation fund scheme (TUFS), now under revamp, may see the restructured scheme taking off by end-May. But the revamped fund will not be open-ended as it used to be in the past.

The restructured TUFS, besides change in the funding pattern, may also cap the investment to be allowed under the route, especially in terms of installing used weaving machinery as the government and the industry representatives strongly favoured discouraging obsolete technology imports, according to Mr Sudripto Roy, Joint Secretary, Union Ministry of Textiles.

Mr Roy, who is also the member-secretary of the empowered committee for TUFS, said these were among the views that emerged at the March 28 meeting the Government and the Textile Ministry officials had with the textile industry representatives on the changes to be effected in the TUFS whose tenure has been extended for the entire 11th Plan period.

Biggest challenge

Talking to reporters from The Hindu group here, the senior government official conceded that the biggest challenge for the revamped TUFS would be one of handling the limited corpus allowed by the Centre — Rs 911 crore — and how best the available resource could be leveraged to fulfill the sectoral requirements within the industry.

As such, a good part of this fund, say between Rs 500 and Rs 700 crore, would go to servicing outstanding interest subsidy, pending since the third-quarter. The TUFS administrators would thus be left with hardly Rs 200 crore or so to service new investments. This means the Textile Ministry would have to approach the Finance Ministry seeking an additional Rs 535 crore for the current fiscal.

The sectoral focus of the revamped TUFS would be on processing, garmenting and geo-textile. Though spinning and weaving continue to engage its attention, the restructured proposals strongly advocate slicing the interest subsidy to spinning by a percentage point from the existing five per cent to enable cross subsiding the weaving sector.

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