The Cabinet Committee on Economic Affairs, chaired by the Prime Minister, Mr. Narendra Modi, recently approved the introduction of the Amended Technology Upgradation Fund Scheme (ATUFS) in place of the existing Revised Restructured Technology Upgradation Fund Scheme (RR-TUFS) for the textiles industry.
The new scheme specifically targets employment generation and export by encouraging the apparel and garment industry which will provide employment to women in particular and increase India’s share in global exports; promotion of technical textiles, a sunrise sector, for export and employment; conversion of the existing looms into better technology looms for improvement in quality and productivity; and improvement in quality in the processing industry and checking fabric imports by the garment sector.
The amended scheme would give a boost to the “Make in India” campaign in the textiles sector which is expected to attract investment to the tune of Rs. 1 lakh crores and generate over 30 lakh jobs.
A Budget provision of Rs. 17,822 crores has been approved, of which Rs. 12,671 crores is for committed liabilities under the ongoing scheme and Rs. 5,151 crores for new cases under ATUFS.
All cases pending with the Office of the Textile Commissioner (TXC), which are complete in all respects, would be provided assistance under the ongoing scheme, and the new scheme will be given prospective effect.
TXC is being reorganised; with its office set up in each State. Its officers would 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 State Government agencies.
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 30 crore rupees for entrepreneurs over a period of five years, and the remaining sub-sectors eligible for subsidy at a rate of 10 per cent, subject to a ceiling of Rs. 20 crores on similar lines.
TUFS was introduced by the Government in 1999 to promote new and appropriate technology for making the textile industry globally competitive and to reduce the capital cost for the industry. A sum of Rs. 21,347 crores was provided as assistance to the industry during 1999-2015. This led to investments worth Rs. 2,71,480 crores 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 crores was provided for attracting investment of Rs. 1,51,000 crores during 2012-2017. Of this, Rs. 9,290 crores was meant for committed liabilities and Rs. 2,662 crores for new investment. The amount provided for new investment was by now been exhausted and therefore the Ministry of Finance was approached for enhancing the allocation.
The amendments are expected to plug the loopholes in the earlier scheme and improve ease of doing business. It will also give a big boost to employment generation and textile exports.