Cabinet likely to clear TUFS tomorrow

After a lot of hue and cry over the announcement of the restructured techonology upgradation funds scheme (TUFS) for the textile sector, which is under pressure to sustain and fight the rupee appreciation, the union cabinet is expected to clear the scheme tomorrow.

Finance Minister P Chidambaram, while announcing the budget for the current fiscal, had announced continuation of TUFS during the Eleventh Plan period and allocated Rs 911 crore for 2007-08 as against a provision of Rs 535 crore last year.

Sources in the government said: "The restructured TUFS has now been extended to the garment and technical textiles segments apart from processing. The policy guidelines regarding the same will be in place in a week."

Currently, under TUFS, textile processing units get 5% interest reimbursement on loans taken and 10% capital subsidy. These benefits will also be extended to other two fast growing sectors, sources said.

The government has allocated Rs 10,000 crore for TUFS for the 11th Plan.