Textile units in India want the Technology Upgradation Fund (TUF) subsidy released on time. They say if this doesn’t happen hundreds of textile units in the country would shut down.

The subsidy has been pending for more than one-and-a-half years. Meanwhile there has been complete erosion of working capital and a good number of textile units have started to incur cash losses due to the glut in the market.

TUF allocation in the 2016-17 Budget is only Rs 1,480 crores against the actual requirement of over Rs 7,000 crores. That means an allocation of the balance fund of Rs 5,500 crores is needed to meet the liabilities of the backlog period.

The spinning sector has been excluded under the amended TUF scheme and interest subsidies ranging from two per cent to six per cent (extended under the earlier scheme) have been discontinued.

The amended TUF scheme would give a boost to Make in India in the textile sector and is expected to attract investments to the tune of Rs one lakh crores and create over three million additional jobs over a period of seven years. The objective of the Technology Upgradation Fund scheme is to leverage investments in technology upgradation in the textile and jute industry and help them overcome technological obsolescence and create economies of scale.