Small handloom and textile manufacturers say that the amended Technology Upgradation Fund Scheme has benefitted only big corporate houses. The amended scheme has been recently approved in place of existing Revised Restructured Technology Upgradation Fund Scheme for technology upgrade.

TUFS had played a pivotal role in the uplift of local industry, but now the subsidy for the handloom sector has been reduced to 15 per cent from 30 per cent. This means, subsidy will now be given on the purchase of machinery worth Rs 30 crores, while earlier it was given on the purchase of machinery worth Rs 1.5 crores.

Small manufacturers say TUFS was introduced to benefit them but now even big manufacturers will be able to benefit from the scheme. The Technology Upgradation Fund Scheme was introduced 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.

Under the amended TUFS, the government has made a fresh allocation of Rs 5,151 crores as a one time capital subsidy for new investment in addition to a marginal increase on limited liability to the tune of Rs 3,381 crores for the next five years.