Textile units to get support under TUFS
05 Sep 13 17:10
New Delhi, Sept 5 (KNN) The textile industry which is in need of urgent modernization and is in the process of fresh investment is expected to get financial support from the government under the Technology Upgradation Fund Scheme (TUFS).
The sectors which stand to benefit are spinning, weaving, processing, technical textiles, jute, silk, garmenting, cotton ginning, wool and power looms.
According to an official of Cotton Textiles Export Promotion Council, the industry can borrow another Rs 3,200 crore as working capital from banks totalling thereby an investment of Rs 4,000 crore in the next six months.
The move will help exporters take advantage of the rupee depreciation. The rupee depreciation has directly benefitted the Indian textile industry and given it an edge over neighbouring countries like China, Bangladesh and Sri Lanka.
In the newly announced TUFS, capital subsidy for new shuttle less looms has been raised from 10 to 15 per cent and the rate of interest reimbursement has been increased from five to six per cent. Further, the margin money subsidy has been increased from 20 to 30 per cent with an increase in subsidy cap from Rs 1 crore to Rs 1.5 crore.
Recently, the Cabinet Committee on Economic Affairs had given its approval for implementation and continuation of TUFS during the XII Plan period with a major focus on power looms with a total outlay of Rs 11,900 crore.
The scheme is aimed to promote indigenous manufacturing of textile machinery.
The capital subsidy for handloom and silk sectors would be increased from 25 per cent to 30 per cent. In addition to this, margin money subsidy cap would be increased from Rs 45 lakh to Rs 75 lakh in respect of MSME and jute sectors.
Sectoral cap of 26 per cent will be applicable only for the spinning segment and sectoral caps for all other segments have been removed to enable balanced growth across the value chain.
Focus will be on power looms with a total outlay of Rs 11,900 crore.