Textile ministry nod for subsidy on machine accessories

In a welcome move, the textile ministry has decided to extend the facility of 20 per cent capital subsidy, provided for textile machinery under the Technology Upgradation Fund (TUF) scheme to machine accessories.

The move is expected to help textile manufactures adopt value addition at lesser costs and develop different varieties and quality of textiles.

Giving details to Business Standard, Federation of Indian Art Silk Weaving Industry (FIASWI) chairman Arun Jariwala said, "A meeting of the textile advisory and monitoring committee was held in Mumbai recently. The committee recommended that machine accessories should also be covered under TUF, and provided the 20 per cent capital subsidy, which at present, is provided only for textile machinery."

"The recommendation was submitted to the textile ministry in New Delhi during the committee's visit. The ministry has accepted the recommendation, and given its nod to the move to provide capital subsidy on machine accessories, in addition to the textile machinery as well. The decision will be beneficial for the textile industry," he said.

"An official circular regarding the decision has not been issued by the ministry as yet, but is likely later in the week," Jariwala added.

Informed industry sources said that the committee had also recommended that the capital subsidy be provided directly to the banks, instead of the machinery manufacturers. This recommendation too, has been accepted by the ministry.

The ministry, however, is yet to take a decision regarding the committee's recommendation that the practice of inspection, after the installation of the machinery, be stopped, sources added.

The TUF scheme was introduced by the textile ministry in 1999 for a period of five years, with the aim of upgrading the technology in different segments of the textile industry.

The period of implementation of TUF was extended to 2007, following demands from the industry.

The main feature of the scheme is it provides reimbursement on the interest paid by the textile businessman to the lending agency on a project of technology upgradation, and also provides capital subsidy.