Tamil Nadu   

SIMA welcomes announcement on TUFS

COIMBATORE: Southern India Mills’ Association has appealed to the Union Government to speed up settlement of arrears under the Technology Upgradation Fund Scheme.

Welcoming the announcement of the revised scheme, the association chairman, K.V. Srinivasan, has said in a release that many mills had not received the TUF interest subsidy even for the quarters of June 2006 onwards. “Immediate action by the Government in this regard will be of great help to the textile industry to buy the raw material during the peak season,” he said.

Further, the Centre should evolve an “effective system” to ensure that eligible applicants got the interest and capital subsidies under the revised scheme within the subsequent quarter.

The additional 10 per cent upfront capital subsidy for the garment sector would encourage substantial investment in the segment. Under the new scheme, interest subsidy was reduced to four per cent from five per cent for spinning machinery.

However, it was retained at five per cent interest subsidy for the other segments. The scheme also provided 10 per cent capital subsidy in addition to the five per cent interest reimbursement for technical textiles.

The capital ceiling had been doubled from Rs. 1 crore for the power loom sector and the scheme provided 20 per cent margin money subsidy in lieu of five per cent interest reimbursement. Investments such as land, factory building, pre-operative expenses and margin money for working capital would not be eligible for benefit under the scheme except meant for apparel sector with existing 50 per cent cap.

The Government announced extension of the scheme for the Eleventh Plan Period in the Union Budget. Though the industry was facing severe financial crisis and sluggish market due to rupee appreciation against the dollar, hike in interest rates and raw material prices, the new scheme would “pave the way for achieving the targeted investment of Rs. 1.94 lakh crore by 2012,” he said.

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