The Indian textile industry has appealed to the Textile Ministry to announce the new Technology Upgradation Fund (TUF) Scheme for the XII Plan immediately.
Industry sources said that they were unable to plan their investments pending an announcement of the new scheme.
The scheme was launched in April 1999. It has attracted over Rs 2.3 lakh crore investments so far, towards capacity building and modernisation.
The scheme currently provides interest subsidy up to 5 per cent and a 10 per cent capital subsidy for certain textile machines in weaving, processing and technical textiles segments.
The Government had, earlier this year, announced that the scheme would be in operation for the entire period of the XII Plan.
It is expected to attract investment of Rs 1.51 lakh crore. The Government had even made an allocation of Rs 2,400 crore in the budget for 2013-14.
Emphasising the need for continuation of the scheme, the Southern India Mills Association Chairman S. Dinakaran said, “India has the potential to double its exports and business size during the next seven years if the technology is upgraded. Considering the high bank interest rate of 14 per cent and wafer thin margin of the textile industry, it is essential to continue the scheme in the 12{+t}{+h} plan.”
Dinakaran also appealed to the Union Textile Minister Anand Sharma to provide the TUF subsidy for the blackout period (June 29, 2010 to April 27, 2011, when the scheme was discontinued for want of funds). “Investments during this period were over Rs 23,000 crore. Extension of TUF subsidy to all the units that had invested during this period is necessary to create a level playing field," he said and urged for allocation of necessary funds for all pending cases under List I and II, owing to the mistakes made by the respective banks.