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Govt boosts textile technology upgradation with Rs17,822 cr allocation

31 December 2015

The government on Wednesday decided to amend the Technology Upgradation Fund Scheme (TUFS) for the textile and garment sector, involving total allocation of Rs17,822 crore, to give a boost to 'Make in India' by generating investment of Rs1,00,000 crore and thereby creating over 3 million jobs

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi has approved the introduction of `Amended Technology Upgradation Fund Scheme (ATUFS)', which will replace the existing Revised Restructured Technology   Upgradation Fund Scheme (RR-TUFS), for technology upgradation of the textiles industry, with effect from the date of notification of the scheme.

The new scheme specifically targets employment generation and export by encouraging apparel and garment industry, which will provide employment to women in particular and increase India's share in global exports.

The amended scheme proposes promotion of technical textiles, a sunrise sector, for export and employment.

It is proposed to promote conversion of existing looms to better technology looms for improvement in quality and productivity as also encourage better quality in processing industry and check the need for import of fabrics by the garment sector.

Under the new scheme, there will be two broad categories:

  • Apparel, garment and technical textiles, where 15 per cent subsidy would be provided on capital investment, subject to a ceiling of Rs30 crore for entrepreneurs over a period of five years.
  • Remaining sub-sectors will be eligible for subsidy at a rate of 10 per cent, subject to a ceiling of Rs20 crore on similar lines.

The amended scheme would give a boost to `Make in India' in the textiles sector; it is expected to attract investment to the tune of Rs1,00,000 crore, and create over 3 million jobs.

A budget provision of Rs17,822 crore has been approved, of which Rs12,671 crore is for committed liabilities under the ongoing scheme, and Rs5,151 crore is for new cases under ATUFS.

All cases pending with the Office of Textile Commissioner, which are complete in all respects, will be provided assistance under the ongoing scheme and the new scheme will be given prospective effect.

The textile ministry also plans to reorganize the Office of Textile Commissioner (TXC), with offices set up in each state. The TXC will be closely associated with entrepreneurs for setting up the industry, including processing proposals under the new scheme, verifying assets created jointly with the bankers and maintaining close liaison with the state government agencies.

The implementation of the scheme will be executed and monitored online under iTUFS, launched in April 2015.

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. A sum of Rs21,347 crore has been provided as assistance to the industry during 1999 2015. It has led to investments worth Rs2,71,480 crore, and created job opportunities for nearly 4.8 million people.

The scheme was earlier amended for continuation during the 12th Plan. A sum of Rs11,952 crore was provided for attracting investment of Rs1,51,000 crore during the period 2012-2017. Out of this, Rs9,290 crore was meant for committed liabilities and Rs2,662 crore for new investment.

The amount provided for new investment has exhausted and therefore the finance ministry has been approached for enhancing the allocation. The amendments in the scheme are expected to plug loopholes in the earlier scheme and improve ease of doing business. It will also give a boost to employment generation and exports in the textile sector in a big way.

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