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Coimbatore, July 11

The South India Small Spinners Association (Sisspa) has said that capacity building in the textile industry being capital-intensive, the stoppage of technology upgradation fund scheme (TUFS), which provides capital subsidy in the form of interest reimbursement, will make textile mills' modernisation and expansion financially unviable.

Expressing unhappiness over the Textile Ministry's July 6 order stopping sanctioning of fresh loans under TUFS, Sisspa has, in a communication to the Union Finance Minister, said that many of its member-mills are awaiting sanctions for their new projects under TUFS from the banks and nodal agencies as the cut-off date for the scheme, as fixed by the government, was March 31, 2007.

Pending sanction of new TUFS loans, these units had already invested huge money in land and building and for building other infrastructure and at this stage, stopping of sanction for new proposals would hit them badly.

Calling upon the Centre to continue to operate TUFS till the originally fixed deadline, Sisspa felt if the Government failed to do so , many of the textile assets would turn into non-performing assets.

In a similar communication addressed to the Tamil Nadu Chief Minister, Mr M. Karunanidhi, Sisspa has asked him to take up the issue with the Centre.

(This article was published in the Business Line print edition dated July 12, 2006)
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