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G. Gurumurthy

Wind mills investments are not textile machinery-specific Such investments are not part of textile modernisation Financial support should come from Non-Conventional Energy Resources Ministry

Coimbatore , Oct. 8

THE Cabinet Committee on Economic Affairs has rejected the Textiles Ministry's recommendation to consider investments made by textile units in wind energy projects as part of the Technology Upgradation Fund Scheme (TUFS). Under TUFS, textile units are given loans at a concessional rate.

The CCEA, in its meeting last Thursday, refused to accept the industry's view point that investment on wind project would qualify under the TUFS components.

The Joint Secretary in the Ministry of Textiles, Mr Sudripta Roy, told newspersons on Saturday that the Finance Ministry believes that wind mills were not textile machinery-specific and any investment on them did not constitute modernisation of textile projects for which TUF had been created.

The CCEA also felt that if any financial support for wind equipment installation should be accorded, it should come from the Ministry of Non-Conventional Energy, the designated agency for the promotion of renewable energy projects.

The Centre had disallowed TUFS benefits for wind mill projects since February on the grounds that installation of wind equipment could neither be treated as part of the modernisation of the textile production process nor does the investment in wind energy project be technically supported as textile machinery-specific. The industry, aggrieved over the stoppage of TUFS benefits to wind mill projects, argued that it hedged investment on wind energy projects against rising energy costs, a crucial factor in checking the production cost.

Mr Roy at the 30th technological conference of the South India Textile Research Association on Saturday said the textile project investment under TUFS had caught up of late and the Ministry targeted TUFS sanction of Rs 4,500 crore this fiscal might be breached, going by the trend of TUFS loan off-take.

Up to September, the total sanction of TUFS loan touched Rs 3,200 crore. Considering the credit utilisation, his Ministry had sought from the Centre an additional Rs 500 crore to be released for TUFS. During 2004-05, the total TUFS loan utilisation was around Rs 3,700 crore.

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No TUFS benefit for wind energy investments by textile cos: CCEA

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