The cabinet committee on economic affairs (CCEA), which met on Thursday, also approved the continuance of the Centrally-sponsored scheme of restructuring and reorganisation of teacher education. The cabinet also met on Thursday and decided to take over the Bihar Engineering College and restore the Central university status to the university of Allahabad.
As per the CCEA decision, now the TUFS has been enlarged by offering small-scale powerloom units an additional option of an incentive of 20 per cent of the cost of modern weaving machinery up to Rs 50 lakh. Such units can also avail the facility of credit from a larger network, including all cooperative banks and other genuine non-banking financial companies, recognised by the Reserve Bank of India.
According to an official release, the new move would facilitate powerloom units in the decentralised sector to access funds for modernisation to improve the quality, productivity and cost competitiveness. An estimated 32,000 modern looms will be added with a projected benefit of Rs 7,500 crore.
The extension of TUFS will benefit the entire textile sector and certain crucial segments. The scheme, launched on April 1, 1999, for five years, offered the incentive of a rate of interest on the credit for modernisation lower by 5 percentage points from the prevailing market rate. The Industrial Development Bank of India, the Small Industries Development Bank of India and Industrial Finance Corporation of India were made nodal agencies to provide finance.
The IIUS, under the department of industrial policy & promotion, has an allocation of Rs 675 crore for the Tenth Five Year Plan (2002-07). The scheme would focus on the creation of quality infrastructure in existing industrial clusters with high growth potential. Initially, 20-25 clusters would be taken up in the Tenth Plan.
An important feature of the IIUS is that it would be implemented through a special purpose vehicle, formed by the the cluster or industry association at the local level, so as to ensure the infrastructure development is user-driven.