The lower allocation for the Amended Technology Upgradation Fund Scheme (ATUFS) for the textile and garment sector is unlikely to discourage investments, as “allocation can always be raised, depending on the scheme’s performance and employment potential”, textile secretary Sanjay Kumar Panda said on Thursday.
The government on Wednesday approved Rs 17,822 crore, of which `12,671 crore would be used for clearing pending claims under the current TUFS, while only Rs 5,151 crore would be allocated for subsidy payment under the new scheme for a period of seven years. Barring 2015-16, when the Budget allocation for the TUFS was trimmed to Rs 1,521 crore, the Budget outlay was Rs 2,400 crore for 2013-14 and Rs 2,300 crore for 2014-15.
While hailing the clarity and scope for faster clearance of subsidies under the new scheme, textile analysts had said the curtailing of funds could take some shine off the new scheme. Textile mills have been complaining of inordinate delays and errors in reporting of interest subsidies by banks in recent years under the TUFS. The new scheme, under which only capital subsidy will be offered and interest subsidy has been scrapped, is expected to remove such hurdles, as it has also scrapped.
Admitting that the current outlay is less than expected, Panda added that what was more important at this juncture was to set in motion a good and predictable scheme, which would make the flow of funds much easier and timely for mills. “If the government finds the new scheme to be working well, I am sure it will raise fiunds in future,” he said.
More time required to comply with green norms
Panda said he has written to the environment ministry seeking more time for mills to comply with the draft rules circulated by the latter on liquid discharge from industrial units.
The textile ministry is of the view that the environment ministry’s proposal to mandate virtually all the textile units to reduce their effluent discharge to zero could lead to closure of many units and consequently many people may lose their jobs. The proposed standards seek to lay down zero liquid discharge for textile processing units where water discharge is greater than 25 kilolitres per day.
The textiles ministry says the domestic processing industry is largely unorganised and comprises small and medium units. The proposed norms are stringent in terms of capital investment and it would also have high recurring expenditure. The domestic industry has already requested to review the proposed environmental standards.