Southern India Mills Association today urged Finance Minister Arun Jaitley to allocate adequate funds for clearing the Technology Upgradation Fund Scheme (TUFS) subsidy backlog pending since September 2014.
"The subsidy is pending for more than one and half years and most of the spinning mills were incurring losses due to glut in the market, even as the working capital of the mills has completely eroded," said SIMA Chairman M Senthilkumar.
Pointing out that only Rs 1,480 crore was allocated for Budget 2016-17 as against the actual requirement of around Rs 7,000 crore, he appealed to the Centre to allot the balance fund of around Rs 5,500 crore to meet the liabilities of backlog period and also up to March 31, 2017.
"Several hundreds of textile units are likely to become NPAs as TUFS subsidy has not been released on time," he claimed while requesting Finance Ministry to allot the required funds immediately to prevent textile units from becoming NPAs.
The Cabinet has already approved extension of TUF scheme for the entire 13th five year period and also approved a grant of Rs 17,822 crore to meet the committed liabilities of the scheme under pipeline and also the ongoing schemes apart from the new scheme.
Under amended TUFS, the spinning sector has been excluded, while 15 per cent capital subsidy has been extended to garments and technical textiles and 10 per cent capital subsidy for weaving and processing sectors.
Moreover, the interest subsidies ranging from 2 to 6 per cent extended under an earlier scheme has been discontinued, Senthilkumar said.
