The new scheme is expected to attract investments to the tune of Rs.1 lakh crore
he 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 per cent 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.
