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Govt rejects subsidies on investments during black-out period

The government has rejected claims made by the textile mills seeking subsidy against investments made under the Technology Upgradation Fund Scheme (TUFS) during the black-out period. Industry sources say that the subsidy claims are to the tune of Rs1,000-1,200 crores.

The blackout period is considered to be from June 28, 2010 to April 27, 2011, when the government had stopped fresh sanctions of projects under TUFS, to change it from an open-ended scheme to a closed-ended one, and launched the revised scheme only from April 2011. The allocation of a total of Rs17,822 crores approved by the Cabinet Committee on Economic Affairs (CCEA) last week for subsidy payments under both the old and the new schemes have not considered claims made for investments made during the black-out period.

The Cabinet announced a new Amended Technology Upgradation Fund Scheme (ATUFS) last week and approved Rs12,671 crores for its “committed liabilities” under the old scheme. It provided another Rs 5,151 crores for subsidy payment under the new scheme (ATUFS) over a period of seven years.

The industry is of the opinion that the government’s decision to not consider the black-out period cases as “committed liabilities” would adversely impact textile mills, which have taken loans to invest in expansion or upgradation and are simultaneously facing low demand from the importing countries.

Texmin.nic.in

 
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