The Centre will not discontinue the Technology Upgradation Fund Scheme (TUFS) and rather restructure it keeping in view the complaints of the textile industry, Union Minister Santosh Gangwar said today.
TUFS was introduced in 1999 to catalyse investments in all the sub-sectors of textiles and jute industry by way of 5 per cent interest reimbursement.
The Textile Minister said his ministry has requested the Finance ministry to make the desired changes, and the "scheme will not be discontinued" but will only be tweaked to remove the "complaints" by the industry.
However, representatives of the textile industry are of the view that they should be consulted before the requisite changes are made, pointing out that the sector is in a "bad shape" and the government has not disbursed subsidy amount under the scheme for the period after September 2014.
"TUFS will remain. However, we are making some changes (in the scheme). We have suggested to the Finance Ministry that the scheme should not be discontinued as it is in force since 1998-99 and has benefited the sector immensely. There was a blackout and leftout period in between which was wrong," Gangwar told PTI on the sidelines of an Assocham event here.
Asked by when the changes in the new scheme will be notified, he said "it will be known in hardly 15 days".
Gangwar added that Prime Minister Narendra Modi wants the scheme to "reach a logical end".
However, he added the government will not discontinue the scheme but will restructure it in such a manner that there are no "complaints". As of now, the scheme is to continue till March 2017, the end of 12th plan period.
Confederation of Indian Textile Industry (CITI) Secretary General Binoy Job said: "For more than a year, the money has not been disbursed. This year the subsidy amount was released in September, but that was for until September 2014.
"As a result, we are badly stuck as textile industry runs on bare minimum margin of 2-5 per cent. The industry is already in a bad shape because of global market conditions like China slowdown, and is thus, heavily dependent on the subsidies.
"If the government does not disburse committed support under TUFS, we will be in a soup. Before restructuring, the government should consult the textile industry," he added.
Job further said that the Rs 1,520 crore allocated for TUFS in the 2015 budget is "quite less" since as per the scheme, at least Rs 3,000 crore should have been provided.
Besides, the Textile Minister expects the new policy to be finalised before the Winter Session of Parliament.
"We have circulated the draft policy for inputs among various ministries. I expect the new policy to be finalised before the Winter session of Parliament," Gangwar said.
