The Hindu Business Line : Modified tech fund norms: Spinners want prior notice

Coimbatore April 22 Apprehending their exclusion from the purview of the Technology Upgradation Fund Scheme (TUFS), textile spinners have asked the Centre for at least three months notice prior to effecting the provisions of the modified TUFS.

Instead of withdrawing the scheme abruptly for any particular sector, the Government can give a suitable time gap, say fixing three months deadline, so that the applicants in the pipeline seeking TUFS assistance can exhaust their opportunity, the Tamil Nadu Spinning Mills Association (TASMA) has said.

The TASMA in a communication addressed to the Union Finance Minister, Mr P. Chidambaram, pointed out that even as the Government has decided to extend the TUFS tenure for the next five years, the hardening bank lending rates has proved to be a dampener.

The interest liability has now surged with most of the banks revising their rates from 8 per cent to 12 per cent. This has called for a higher TUFS subsidy reimbursement, which, the TASMA has said, should be increased from the current 5 per cent to 7 per cent.

As for the inordinate delay in getting the TUFS subsidy reimbursement, the association has said one of the reasons for this is the bank-wise priority accorded in clearing the pending interest subsidy.

Instead, the Government should clear the subsidy based on the seniority of the TUFS loan account by allowing the `first-come-first-disbursed' concept.

Pointing out that the rising domestic raw cotton prices, in the wake of free export of cotton, has impacted the mills by severe cash losses every month, the TASMA has asked for neutralisation of the domestic cotton price.

The Government should have removed the 10 per cent import duty on raw cotton but this has not happened in the 2007-08 Budget, which was widely expected by the industry, the association stated.

More Stories on : Textiles | Exports & Imports | Modernisation | Tamil Nadu

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