Tech upgrade scheme hits funds roadblock

Font Size

Print

Feedback

Email

Discuss

• Discount UK Shopping

Related Articles

HP launches new Mini210 notebooksTechnical snags to hit auction of FM-IIIIndian consumers choose IPS for better TV viewingIndian internet users vulnerable to cyber fraud: S...

New Delhi, Chennai: The government’s technology upgradation fund scheme (TUFS) has run into a fund deficit following an overwhelming demand from the industry for subsidy on capital cost for modernising operations.

“To clear subsidy till December, we will be requiring an additional amount of Rs 1,884 crore in 2009-10,” textiles minister Dayanidhi Maran said at the meeting of the Parliamentary consultative committee here on Thursday.

Under the Technology Upgradation Fund Scheme (TUFS), the government extends subsidy of 5% to the capital cost of modernisation of the industry.

The government had made a provision of Rs 2,890 crore for 2009-10, of which Rs 2,546 crore has already been released this year and to clear the subsidy till December, additional funds are required, the minister said.

The scheme enabled the textiles industry to face successfully challenges of global competition and reduced by 5% the cost of capital for acquisition of the state- of- the- art technology. The scheme ignited growth of processing, garmenting and technical textiles sectors by extending 10% capital subsidy; assisted the powerloom units by extending 20% margin money subsidy and empowered the small scale sector with 15% capital subsidy.

The industry has already availed Rs 66,275 crore under the scheme since its inception on April 1, 1999 till June 30. TUFS has stimulated additional investments of Rs 1,79,834 crore and benefited 25,809 textiles units, including 18,266 small scale units, Maran said.

Maran also said modernisation of 43 National Textile Corporation mills is under way and a technical textile mill was proposed to be set up in Coimbatore.

Giving an overview of the working of the National Textile Corporation (NTC), Maran said ``with the help of active support of the government, the NTC has come out of the red and has drawn a plan to achieve a turnover of Rs 2,014 crore by 2014 from Rs 524 crore during 2008-09 . NTC has so far spent Rs 663 crore towards modernisation, Maran said.

The revival and modernisation of NTC mill has been due to Rs 5,267 crore modified revival scheme, which was approved by BIFR in 2006-07. The scheme envisaged revival of 43 mills, of which 24 mills were being modernized by NTC itself and 19 mills were being modernised through Public Private Partnership (PPP) mode.