The Cabinet Committee on Economic Affairs, chaired by
Prime Minister Narendra Modi, cleared the ‘Amended Technology
Upgradation Fund Scheme,’ under which apparel, garment and technical
textiles will get 15 % subsidy on capital investment, subject to a
ceiling of Rs.30 crore over a period of five years.
The
remaining sub-sectors will be eligible for 10 per cent subsidy, subject
to a ceiling of Rs.20 crore, on similar lines, according to a
government statement. A budget provision of Rs.17,822 crore has been set
apart for committed liabilities and new applications.
“The
amended scheme would give a boost to Make in India in the textiles
sector. It is expected to attract investments to the tune of Rs.1 lakh
crore and create over 30 lakh jobs,” according to the statement.
The
amended scheme will replace the existing Revised Restructured
Technology Upgradation Fund Scheme (RR-TUFS) with effect from the date
of notification of the scheme. The budget provision of Rs.17,822 crore
will include Rs.12,671 crore for committed liabilities under the ongoing
scheme and Rs.5,151 crore for new cases under the ATUFS.
All
cases, which are complete and pending with the Office of the Textile
Commissioner will be provided assistance under the ongoing scheme and
the new scheme will be given prospective effect.
The
Technology Upgradation Fund Scheme for the textile industry was
introduced in 1999 and Rs.21,347 crore has been provided as assistance
between 1999 and 2015. Official sources said the ATUFS is expected to
attract Rs. 1 lakh crore investment in the next seven years (till
2021-2022). The new scheme does not cover the spinning sector as there
is excess capacity now.
The new sanctions under TUFS
were kept pending since April 2014 for want of funds and the ATUFS
would ease the financial position for the industry and encourage
investments, said M. Senthil Kumar, Chairman of Southern India Mills’
Association Chairman.
With the announcement of capital subsidy instead
of the existing combination of interest subsidy and capital subsidy, the
industry will get the assistance on time, he said. Confederation of
Indian Textile Industry Chairman Naishadh Parikh said the scheme will
trigger growth and exports for the textile industry and it will aid the
‘Make in India’ initiative.
With the new support
measures the industry is confident of moving up the value chain and
become globally competitive, according to the Indian Texpreneurs
Federation.
Note
Note
The Technology Upgradation Fund Scheme (TUFS) was
introduced by the Government in 1999 to facilitate new and appropriate
technology for making the textile industry globally competitive and to
reduce the capital cost for the textile industry. A sum of Rs. 21,347
crore has been provided as assistance to the industry during 1999- 2015.
It has led to investments worth Rs.2,71,480 crore, and created job
opportunities for nearly 48 lakh people.
The scheme
was earlier amended for continuation during the XII Plan. A sum of
Rs.11,952 crore was provided for attracting investment of Rs.1,51,000
crore during the period 2012-2017. Out of this, Rs.9,290 crore was meant
for committed liabilities and Rs. 2,662 crore for new investment. The
amount provided for new investment has been exhausted and therefore the
Ministry of Finance decided to enhance the allocation. The amendments in
the scheme are expected to plug the loopholes in the earlier scheme and
improve Ease of Doing Business. It will also give a boost to employment
generation and exports in the textile sector in a big way
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