TUFS delay Textile growth
Textile companies have alleged that delays in disbursement of loans under the Technology Upgradation Funds Scheme (TUFS) are resulting in quarterly losses to the tune of Rs 350 crore to the sector.
The companies say they do not have enough funds to place orders for new machines and raw material, a situation that is affecting their productivity and consequent profitability.
In a letter to Textiles Minister Shankersinh Vaghela, the Confederation of Indian Textile Industry (CITI) has claimed the arrears are piling up and adding to the troubles of a sector already hit by the appreciating rupee.
Former association chairman V K Ladia said, “Due to the delay in providing loans, companies are unable to even buy fresh stocks of cotton.”
“In South India, the TUFS interest subsidy arrears stood at over Rs 11.7 crore up to December 2006. Since then, the arrears are piling up as another 10 months have passed,” CITI sources said, adding that the total nation-wide outstanding dues were in the region of Rs 1,000 crore.
The companies claim that banks are also not keen on lending funds to the sector.
When contacted, textile ministry officials said there was no backlog in disbursements in 2006-07. They said orders for disbursement of around Rs 243 crore for the year were issued to seven banks last month.
The Textile Commissioner will hold a meeting with banks and textile industry representatives next week to sort out the disbursement issue, among others, the sources added.
TUFS was launched by the textiles ministry in March, 1999 for a period of five years. It was subsequently extended up to March 31, 2007, the end of 10th Five Year Plan (2002-07).
The scheme has been extended into the 11th Plan period and is also set to be revised. “A proposal has been submitted to the Cabinet and we are waiting for it to be cleared,” officials said.
In 2006-07, the central government allocated Rs 535 crore for disbursement under the scheme. The amount was increased to Rs 911 crore for the current fiscal year.
TUFS is intended to facilitate induction of latest technology in textile mills.
Source : Buisness Standard
The companies say they do not have enough funds to place orders for new machines and raw material, a situation that is affecting their productivity and consequent profitability.
In a letter to Textiles Minister Shankersinh Vaghela, the Confederation of Indian Textile Industry (CITI) has claimed the arrears are piling up and adding to the troubles of a sector already hit by the appreciating rupee.
Former association chairman V K Ladia said, “Due to the delay in providing loans, companies are unable to even buy fresh stocks of cotton.”
“In South India, the TUFS interest subsidy arrears stood at over Rs 11.7 crore up to December 2006. Since then, the arrears are piling up as another 10 months have passed,” CITI sources said, adding that the total nation-wide outstanding dues were in the region of Rs 1,000 crore.
The companies claim that banks are also not keen on lending funds to the sector.
When contacted, textile ministry officials said there was no backlog in disbursements in 2006-07. They said orders for disbursement of around Rs 243 crore for the year were issued to seven banks last month.
The Textile Commissioner will hold a meeting with banks and textile industry representatives next week to sort out the disbursement issue, among others, the sources added.
TUFS was launched by the textiles ministry in March, 1999 for a period of five years. It was subsequently extended up to March 31, 2007, the end of 10th Five Year Plan (2002-07).
The scheme has been extended into the 11th Plan period and is also set to be revised. “A proposal has been submitted to the Cabinet and we are waiting for it to be cleared,” officials said.
In 2006-07, the central government allocated Rs 535 crore for disbursement under the scheme. The amount was increased to Rs 911 crore for the current fiscal year.
TUFS is intended to facilitate induction of latest technology in textile mills.
Source : Buisness Standard
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