‘Tuf’ luck for steel on way

NEW DELHI: The textile success story may now be replicated in the steel sector. The Centre is planning to introduce in Budget ���07-08 a Technology Upgradation Fund Scheme (Tufs) to strengthen small and medium steel enterprises. The scheme, proposed by the steel ministry for the Eleventh Plan, is being considered by the Planning Commission, said an official source.

It is expected the government would provide only a token amount of Rs 10 crore in the Budget to start the scheme. The corpus could be increased subsequently subject to the finalisation of implementation strategy, including the funding pattern. It will be a centrally sponsored scheme (CSS) under steel ministry. Under Tufs, lenders give an interest subsidy of up to 5% for modernisation and technological upgrade of certain segments of textile sector, which is reimbursed by the government.

Tufs for steel may be designed in a similar fashion, but the government would have to see whether adequate budgetary support would be available to finance SME steel units, said the source, adding that alternatively, the ministry of steel in consultation with private and public sector steel companies may devise a mechanism where money for the fund is contributed both by the government and the industry.