Now, banks must disclose details of TUFS loan

Written by Neha Pal | Neha Pal | New Delhi | Updated: Dec 4 2010, 04:07am hrs
The ministry of textiles has said banks and financial institutions will have to disclose details about the loan given to a company under the revised technology upgradation fund scheme (TUFS). The scheme was suspended five months ago as it exceeded the planned allocation amount of Rs 8,000 crore in the first three years of the Eleventh Plan period.

A textile ministry official told FE that shortage in allocated money was due to lack of cap on the banks and financial institutions for lending as the government subsidised 5% of interest reimbursements on loans. The ministry is of the view that the banks and financial institutions should give prior information about the amount they are lending and the number of companies that are taking loans from them to keep a track of the utilisation of the allocated amount.

As the amount allocated under the Eleventh Plan was fully used and additional allocations were needed, sanction of projects under the scheme was suspended on June 30, the offical said. The sudden suspension of the scheme has affected the entire textiles industry and the cotton farmers who might think of exporting cotton to neighbouring countries, the official said. Talking about the TUF scheme and the cotton prices, textile minister Dayanidhi Maran had said, "The revised TUFS will be cleared by the Cabinet by year-end and cotton prices would stabilise by December 15. The official said the new TUF scheme will include a new segmentsynthetic and technical textilesthat would become operational provided the Cabinet gives its approval to the proposal entailed in the national fibre policy.