Government today approved an Amended Technology Upgradation Fund Scheme (A-TUFS) in place of the existing Revised Restructured TUFS for technology upgradation of the textiles industry, a move expected to boost job creation and exports in the sector.
The amended scheme would give a boost to Make in India initiatives in the sector and is expected to attract investment to the tune of Rs 1 lakh crore and create over 30 lakh jobs.
The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) Chaired by Prime Minister Narendra Modi here.
"A budget provision of Rs 17,822 crore has been approved, of which Rs 12,671 crore is for committed liabilities under the ongoing scheme, and Rs 5,151 crore is for new cases under A-TUFS.
"The amendments in the scheme are expected to plug the loopholes in the earlier scheme and improve ease of doing business. It will also give a boost to employment generation and exports in the textile sector in a big way," an official statement said.
Under the new scheme, there will be two broad categories -- apparel, garment and technical textiles -- where 15 per cent subsidy would be provided on capital investment, subject to a ceiling of Rs 30 crore for entrepreneurs over a period of five years.
The remaining sub-sectors would be eligible for subsidy at a rate of 10 per cent, subject to a ceiling of Rs 20 crore on similar lines.
The implementation of the scheme would be executed and monitored online under iTUFS, launched in April 2015.
The new scheme specifically targets employment generation and export by encouraging apparel and garment industry, which will provide employment to women in particular and increase India's share in global exports.
It will also facilitate promotion of Technical Textiles, a sunrise sector, for export and employment in the sector and promote conversion of existing looms to better technology looms for improvement in quality and productivity.
The A-TUFS will encourage better quality in processing industry and check the need for import of fabrics by the garment sector.
"All cases pending with the Office of Textile Commissioner which are complete in all respects shall be provided assistance under the ongoing scheme and the new scheme will be given prospective effect," the statement said.
Moreover, the office of Textile Commissioner (TXC) is
being reorganised and its offices shall be set up in each state.
Officers of the TXC shall be closely associated with entrepreneurs for setting up the industry, including processing proposals under the new scheme, verifying assets created jointly with the bankers and maintaining close liaison with the state government agencies.
The Technology Upgradation Fund Scheme was introduced by in 1999 to facilitate new and appropriate technology for making the textile industry globally competitive and to reduce the capital cost for the textile industry.
A sum of Rs 21,347 crore has been provided as assistance to the industry during 1999-2015. It has led to investments worth Rs 2,71,480 crore and created job opportunities for nearly 48 lakh people.
The scheme was earlier amended for continuation during the 12th Plan. A sum of Rs 11,952 crore was provided for attracting investment of Rs 1,51,000 crore during the period 2012-2017. Out of this, Rs 9,290 crore was meant for committed liabilities and Rs 2,662 crore for new investment.
The amount provided for new investment has been exhausted and therefore the Finance Ministry was approached for enhancing the allocation.
