TUFS may die a quiet death after March deadline
The PMO and the Planning Commission have opposed extending the scheme beyond the current deadline of March 31 2007, saying schemes that provide subsidy to individual companies should be replaced by infrastructure grants such as those under the Sch...
By KG Narendranath & Sunny Verma, TNN |
NEW DELHI: The textile industry’s favourite Technology Upgradation Fund Scheme (TUFS) may not get a fresh lease of life.
The PMO and the Planning Commission have opposed extending the scheme beyond the current deadline of March 31 2007, saying schemes that provide subsidy to individual companies should be replaced by infrastructure grants such as those under the Scheme for Integrated Textile Parks (SITP).
The TUFS, launched in 1999, enables lenders to give an interest subsidy of up to 5% for modernisation and technological upgradation. Financial institutions have disbursed Rs 12,673 crore under the scheme so far, for projects with total investment of Rs 47,217 crore.
The cost of the subsidy is borne by the government, and resulted in an expend of over Rs 2,500 crore since the start of the scheme. Textile minister Shankersingh Vaghela had favoured the extension of TUFS up to 2010 to meet the ministry’s ambitious export target of $50 billion.
He had also proposed to extend the TUFS benefits (under credit-linked subsidy scheme route currently made available to the processing sector) to technical textile projects also. However, both PMO and Plan panel have said that since textile ministry already offers a host of benefits to the sector, extension of TUFS is not a viable option.
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The matter will come up for discussion again next week, when the 11th Plan will be discussed with the textile ministry, sources said. The PMO has rather emphasised the need to promote schemes such as SITP that lead to infrastructure development for the sector.
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