The Indian cotton textile industry is set to attract Rs 4,000 crores investments in the next six months with the margin money to be received as interest subsidy under the Technology Upgradation Fund Scheme (TUFS). Normally, the blackout period (time difference) consists of three to six months between two subsequent subsidy announcements. This time, however, it was almost 18 months.
The fresh investment in the textile sector is set to accelerate export growth. Indian exporters would be able to take advantage of the rupee depreciation, which has made them more competitive on the global front. TUFS was introduced in April 1999 to provide plan support for modernization of the textile industry in the form of interest reimbursement and capital subsidy. Encouraged by its success, the scheme was extended periodically.
In the newly announced TUFS, capital subsidy for new shuttle-less looms has been raised from 10 to 15 per cent and the rate of interest reimbursement has been increased from 5 to 6 per cent. Further, the margin money subsidy has been increased from 20 to 30 per cent with an increase in subsidy cap from Rs 1 crore to Rs 1.5 crore.
There was no fund available for spinning mills since April 2012. With the inclusion of TUFS in the 12th Five Year Plan, spinning mills will also get an encouragement to boost investment to support overall exports.
