Textile industry sources have voiced concern over the undue delay in disbursement of TUF (Technology Upgradation Fund) subsidy.

“While the scheme has helped transform the industry into a technologically advanced one, the delay in TUF subsidy disbursement is choking the mill sector. According to reports, a sum of ₹3,400 crore remains payable to the respective textile units. The industry has the potential to double the capacity, but the long and endless wait for the TUF subsidy is putting off prospective investors,” said D Prabhu, Secretary, Texpreneurs Forum.

This informal forum, comprising of young entrepreneurs in Tamil Nadu’s textile spinning sector, has appealed to the textile ministry to consider its plea. Members of the forum are planning to visit the powers that be in Delhi to impress upon them the need for early and prompt disbursement of TUF subsidy.

Notwithstanding the delay in TUF subsidy disbursement, Prabhu also noted with concern the need for extending TUF coverage for projects sanctioned during the black out period (between June 29, 2010 and April 27, 2011).

Adverse impact

“The sudden suspension of the scheme for a period of 10 months between June 2010 and April 2011 sent panic waves across the industry, and many projects that were in the pipeline got derailed because of the unexpected policy change. Several trade bodies have taken up this issue, impressing the need for reinstating the scheme with retrospective effect to cover the broken period, but to no avail. It is learnt that projects sanctioned during this black out period stood at around ₹24,000 crore, which would otherwise have been eligible for an interest subsidy of ₹1,200 crore under the TUF scheme,” the forum said, in a communication to Minister of State for Finance Jayant Sinha. The industry seeks immediate government intervention as the inordinate delay in disbursement of TUF subsidy is impacting the working capital requirements of the respective units.

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