TUFS to be applicable in FY13 too

Written by Banikinkar Pattanayak | Neha Pal | Neha Pal | New Delhi | Updated: May 31 2012, 06:44am hrs
The government will extend the provisions of the technology upgradation fund scheme (TUFS), applicable for the 2011-12 fiscal, to this fiscal as well. This would mean that TUFS will be granted funds as per the 2012-13 Budget allocation, but the sectoral cap will be maintained in sync with last fiscal's provisions.

The provisions of TUFS meant for 2011-12 fiscal will be extended to 2012-13 as well until the twelfth five year plan proposals are finanlised, a senior government official said.

TUFS was launched on April 1, 1999, for a period of five years, and was subsequently extended up till March 31, 2007. The scheme was later restructured with effect from April 28, 2011, and approved up till March 31, 2012.

According to official sources, some schemes will likely be tweaked in the 12th plan period, but until those proposals are finalised, the provisions of the 2011-12 fiscal will remain effective so that there is 'no black-out period in between the two plan periods'.

The budget allocation for TUFS in 2012-13 was R2775.80 crore as compared to the revised estimate for 2011-12, which was R3529.67 crore. Even though TUFS was restructured and implemented from April 2011 to March 2012, there was no mention about extension of the TUFS in Budget 2012-13.

Union minister of state for textiles, Panabaaka Lakshmi, had said, The textile ministry is in talks with the government and has submitted a proposal to the Planning Commission for the extension of TUFS in the twelfth plan period.

The restructured TUFS was approved with the enhanced eleventh plan allocation under TUFS from R8,000 crore to R15,404 crore from April 28, 2011. TUFS was restructured to focus on the slow-growing sectors like weaving, as also to encourage forward integration and tighter administrative controls and monitoring of the scheme, said the ministry official.

This subsidy is expected to leverage sectoral investment shares of 26% for spinning, 13% for weaving, 21% for processing, 8% for garmenting and 32% for others (including composite projects, technical textiles, silk, jute, etc).

According to sources, the revised TUFS may come around August-September.

DK Nair, secretary general, Confederation of Indian Textile Industry, told FE, we expect all TUFS provisions of 2011-12 to continue until the revised scheme comes up. However, it's for the government to take a final call.