Agreeing for an extension of Technology Upgradation Fund Scheme (TUFS) following the demand of textile players, the Union government may re-introduce it with some changes. The aim is also to introduce a long term policy for at least 10 years, under the new textile policy, scheduled to be out by this month-end.

Under the revised policy, states where factories exist may have to fund the projects with the states’ share in central taxes increasing to 42 per cent from 32 per cent earlier. TUFS, implemented from April 1999, was introduced to catalyze investments in the textile and jute industry, with a five per cent interest reimbursement. The scheme was initially approved from April 1999 to March 2004, extended to 2007 with modifications and further restructured with effect from April 2011, to March 2012. The government started with a capital subsidy when it was introduced in 1999. Later, the mode of relief was changed to interest subvention. In 2012, the then commerce minister Anand Sharma announced its continuation for the 12th Plan period of 2012-17, with an outlay of Rs 11,900 crores. Of this, Rs 6,000 crores has been released so far.

As per data, the industry utilised Rs 12,383 crores against the budgetary allocation of Rs 13,785 crores during the 11th Plan. Restructured TUFS allocations did not prescribe sectoral ceilings for the spinning, powerloom and handloom sectors. Investments in spinning were Rs 34,347 crores and in the weaving sector, including powerlooms and handlooms, Rs 9,750 crores. Texmin.nic.in