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TUFS to provide one-time capital subsidy

The Technology Upgradation Fund Scheme has been amended. Now, it will provide a one-time capital subsidy for investments in employment- and technology-intensive segments of the textile sector. The move is aimed at promoting exports and import substitution. The scheme will be credit linked and only projects for technology upgradation covered by a prescribed limit of term loans sanctioned by the lending agencies will be eligible for grant of benefits. It will be effective for a period of seven years, up to March 31, 2022. In case the applicant has availed of subsidy earlier, he will be eligible for only the balance amount within the overall ceiling fixed for an individual entity. The maximum subsidy for overall investment by an individual entity will be restricted to Rs 30 crores.

Every individual entity will be eligible for a one-time capital subsidy on the eligible investment, as per the specified rates and the overall subsidy cap. During 2010-11, the scheme was suspended for 10 months, but was eventually restored as a close-ended scheme and restricted to future sanctions and committed liabilities reported by banks. However, the close-ended scheme was introduced without sufficient notice for preparation on the part of lending institutions. So those who had invested during those 10 months in the so-called blackout period of 2010-11 were left out and are still awaiting a decision on their eligibility. The quantum of liabilities under the blackout and left-out period is pegged at around Rs 3000 crores.