The Expenditure Finance Committee (EFC) has decided not to issue any new sanctions under the Technology Upgradation Fund Scheme (TUFS) till the Cabinet Committee on Economic Affairs (CCEA) approves new allocations for the scheme. The circular issued by the textiles ministry has been dispatched to all the nodal agencies and banks concerned.
All the nodal agencies and banks have been advised to freeze all new proposals -- even those which have already been submitted to them. This decision, experts say, will have an adverse effect on the modernization drive of the textile industry and which had benefited all the sections of the industry in the last few years since the scheme came into existence and helped them become competitive in domestic as well as global markets.
TUFS is one of the highly successful schemes implemented by the government. Indian textile industry is reeling under the impact of outdated technology apart from other traditionally identified drawbacks with little or no value-addition, say experts. However, introduction of this scheme has proved to be a proverbial lifeline for the textile and allied industries.
From April 1999 till June 2009, TUFS attracted 26,087 applications entailing a combined project cost of Rs 182,269.91 crore of which the loan application was for Rs 8,4747.01 crore. A total of 25,893 applications were sanctioned for a total project cost of Rs 179,856.38 crores of which the loan component totaled to Rs 78,306.20 crore.
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