Banks get nod to sanction TUF loans
The ministry of textiles on Friday withdrew its directive to banks and financial institutions stopping sanction of fresh loans under the Technology Upgradation Fund Scheme (TUFS) with immediate effect, reports Our Bureau in Ahmedabad.
By TNN |
AHMEDABAD: The ministry of textiles on Friday withdrew its directive to banks and financial institutions stopping sanction of fresh loans under the Technology Upgradation Fund Scheme (TUFS) with immediate effect, reports Our Bureau in Ahmedabad.
The ministry had on July 6 asked all banks and financial institutions to stop sanctioning fresh loans under this scheme. The move comes following a sanction of Rs 500 crore by the finance ministry for the scheme, say sources in the textile ministry.
The Centre had introduced the TUFS for textile and jute industries initially for a period of five years, beginning April 1999 to March ’04. The scheme, intended to facilitate induction of modern technology in the textiles industry, provides 5% interest reimbursement on the loan availed under it.
Following representations from industry, the government extended the scheme up to March 31, ’07. The government was expecting an additional investment of Rs 30,000 crore in the sector in the current fiscal.
The approved Budget estimate under TUFS for the year ’06-07 is Rs 535 crore against the estimated requirement of Rs 1,515 crore. The ministry has sanctioned around Rs 39,050 crore under the TUFS scheme till March ’06. While Tamil Nadu tops the chart in receiving funds under TUFS, Gujarat ranks second.
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The government has also appointed IDBI for textile industry’s non SSI sector, SIDBI for the textile SSI Sector and IFCI for the jute industry as nodal agencies.The move to curb fresh sanction of loans under the scheme had created a furore as textiles’ associations including Tirupur Exporters’ Association had expressed disappointment.
The textiles association had written to the textiles minister requesting him to withdraw the circular which was issued at a time when the industry is gearing up to invest in capacity expansion and modernisation and seeking extension of the scheme.
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