The Hindu Business Line : Ministry to review progress, scope of textile upgradation fund scheme

The Ministry of Textiles has sought expression of interest (EoI) from external consultants for an evaluation of the Technology Upgradation Fund Scheme (TUFS). The consultants have been asked to submit their proposal by November 27.

The Ministry is seeking to assess and evaluate the investment made by the textiles and jute sector under TUFS, the impact of such investments in terms of productivity increase, cost and waste reduction, introduction of a new range of textile fabric and import substitution by comparing the unit-wise position prior to and after TUFS investment.

It also seeks to analyse the low exposure of TUFS to the SSI sector and suggest remedial measures, the pros and cons of continuing second hand machinery imports under the scheme, the impediments in accessing TUFS, and modifications sought to make the scheme more attractive.

It is also proposed to examine the need and justification for expansion of TUFS beyond the Eleventh Five Year Plan Period.

Based on the analysis of the EOI, the selected agencies/consultants would be required to make a detailed presentation before a committee. The selected agencies would thereafter be asked to submit financial bids for the proposed evaluation of TUFS.

The scheme initially launched for a period of five years was later extended till the end of the Eleventh Five Year Plan in a modified form. The Ministry has now sought the EOI from outside agencies to review the progress and scope for further extension.

While the technology levels are benchmarked in terms of specified machinery, there is no cap on funding under the scheme.

Apart from IDBI, SIDBI and IFCI, 13 additional nodal banks are involved in determining the eligibility and releasing the subsidy for the cases financed by them under TUFS.

A quick glance at the progress of TUFS reveals that as on March 31, 2008, 19,775 applications with project cost of Rs 1,25,611 crore were received, of which 19,623 applications with project cost of Rs 1,24,033 crore had been sanctioned and against 19,469 applications, Rs 44,917 crore disbursed.

Under the 20 per cent CLCS-TUFS subsidy scheme for powerloom units (introduced in November 2003), 2,462 cases are said to have been received up to August 2008, with investments in machineries totalling Rs 917.44 crore. A subsidy amount of Rs 144.73 crore is said to have been sanctioned with respect to 2,054 cases and subsidy released totalled Rs 139.29 crore pertaining to 1,986 cases.