With investment and subsidy target falling far below expected levels, the Planning Commission has stressed on the need on a fresh assessment of 'committed liability’ of Technology Up-gradation Fund Scheme (TUFS) under Union textiles ministry during the 12th Five-Year Plan.
TUFS was recently reviewed at the sixth meeting of the inter-ministerial steering committee (IMSC). The meet emphasised on a restructured TUFS.
IMSC found that investment under TUFS fell by around 47 per cent at Rs 25,033 crore on a target of Rs 46,900 crore up to March 2012. Subsidy disbursements were even lower at around 13 per cent at Rs 256 crore on a target of Rs 1,972 crore.
Almost 66 per cent of scrutinised applications were rejected. Rate of condoning was around 19 per cent.
The Planning Commission is against the utilisation of funds meant for 11th Plan during the first year of the 12th Plan period (2012-17).
At the meeting, Bank of Baroda (BOB) Capital Markets submitted an assessment report on 'Stress in the Textile Sector’.
BOB Capital Markets recommended a two–year moratorium on term loans for repayment of principal amount, special provisions in Reserve Bank of India's NPA (non-performing assets) norms to fit in to asset reclassification and additional provisioning with banks and converting eroded working capital to term loans repayable over a period of three to five years with a relief for six months.
Till now, total fund-based credit provided to the textile industry is Rs 1.55 lakh crore. Given adverse market conditions and low margins of profits and reduced cash flow, the industry might reschedule Rs 35,000 crore of loans. Eight major banks and lending agencies carried subsidy liability of Rs 2,381 crore in 6,348 applications.
During the 11th Plan, on an allocation of Rs 15,404 crore made, expenditure under TUFS was, Rs 11,950 crore.
