The Government of India (GoI), Ministry of Textiles (MoT), introduced Technology Upgradation Fund Scheme (TUFS) for Textile and Jute Industries on April 1, 1999, for a period of 5 years, subsequently extended by 3 years to cover sanctions up to March 31, 2007. The Scheme has been modified w.e.f. April 1, 2007, for a period of 5 years i.e. to last till FY 2011-12.
The Scheme is intended to facilitate induction of state-of-the-art or near state-of-the-art technology. Existing units with or without expansion and new units are eligible under TUFS.
IDBI Bank is the Principal Nodal Agency for Textile Industry (Non –SSI Sector). Normally, the projects would be evaluated as per project finance norms. The rate of interest charged is the normal applicable rate as prevailing at the time of sanction/execution of loan documents. Under the modified Scheme effective April 1, 2007, GoI, MoT, gives interest reimbursement of 4% p.a on Rupee Term Loans (RTLs) sanctioned to eligible spinning machinery and 5% p.a. to other than spinning segments.
As regards Foreign Currency Loans, GoI, MoT, provides a cover for actual adverse exchange fluctuations not exceeding 4% / (5%) from the base rate (base rate being the weighted average rate covering all disbursements of the loan) in respect of spinning machinery / (other than spinning segment) or cost of forward cover premium limited to 4% / (5%) p.a. on the base rate of exchange in respect of spinning machinery / (other than spinning segment), as an option, to be exercised by the borrower company once in each financial year. Recognising the potential of garmenting, technical textiles and processing segments for high value addition and employment generation, an additional benefit in the form of 10% capital subsidy is provided in respect of the identified textile machinery for these segments.
For further details on the Scheme, please visit website of Office of the Textile Commissioner at www.txcindia.com