COIMBATORE: The Technology Upgradation Fund Scheme (TUFS), which will now run for another five years, is likely to undergo certain modifications in funding pattern. Caps on investments in certain segments of the sector may be on the cards.

Sudripta Roy, Joint Secretary, Union Ministry of Textiles, told The Hindu here on Thursday that, "The funds available under the scheme should be spent optimally. We have to prune everything that is not adding to value; what are considered as frills."

With the extension of the seven-year-old scheme for another five years (Eleventh Plan period), the Union Ministry of Textiles was reviewing it and would finalise the modifications by the end of May. The Ministry recently held consultations with the industry as part of the review.

The Ministry also issued a circular dated April 4 saying that the scheme would be kept in abeyance (for sanction of any fresh loans) with effect from April 1 till the finalisation of the modifications and issuance of instructions on the implementation of the revised TUFS. "We are trying to look at all their (industry) suggestions. We have to focus on real growth areas. Some of the recommendations of the industry are: cap on second-hand machinery except looms, and reduction of interest subsidy for spinning, for instance.

The Central Government's allocation for the scheme was Rs. 911 crore for 2007-08. However, the backlog of 2006-07 itself was estimated at Rs. 500-750 crore. "Further infusion of funds is necessary for investments and investments become critical at this juncture," he reasoned.May be, another Rs. 500 crore would be needed this year. However, the picture would be clear only when complete data would be available by the end of this month.

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