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TUFS' interest subsidy pattern may be revamped

Our Bureau

COIMBATORE, Nov. 3

THE Union Minister of State for Textiles, Mr Dhananjaya Kumar, has said that the unsatisfactory credit offtake under the Government-sponsored technology upgradation fund scheme (TUFS) among textile entrepreneurs has led the Union Government to reconsider the pattern of the interest subsidy contemplated under the scheme.

``One of the suggestions the Government is considering is acceding to a higher interest subsidy of eight per cent as demanded by the industry, instead of the present five per cent being offered to the TUFS assistance. The other suggestion it has received is to give the subsidy directly to the textile companies in the form of equity corpus instead of the present mode of crediting the interest subsidy into their (the companies') bankers handling the TUFS account,'' Mr Kumar said.

Talking to newspersons after participating in a workshop on quality awareness for the textile and clothing industry held in Tirupur on Saturday, the Minister said that a final decision on these would be taken on the basis of the recommendation to be give n by the special committee under the Chairman of the Planning Commission, recently constituted under the advice of the Prime Minister to help the domestic textile industry. The committee is expected to give its report by next month-end.

The Union Government is, according to him, concerned about the inability of the domestic textile sector to draw new investments and the pace of the utilisation of TUFS also remained below the Government's expectation. In the three years of TUFS operation , as against the Rs 4,600-crore loan sanctioned, credit disbursement was only around Rs 2,900 crore as on end-August 2001, which the Government viewed as unsatisfactory, he said, adding the Government felt the urgent steps were to be taken to remove the bottlenecks in the scheme's operation.

He also wanted the industry to provide the feedback to the Government so that the competitiveness of the industry could be improved.

In view of the challenges and opportunities emerging in the globalised textile and clothing trade, the Government felt for a need to bring all the sectors of the textile industry under a common platform to understand their views and their expectations, M r Kumar said.

The one-day workshop was sponsored by the Textile Committee as part of its nationwide `quality campaign' now being held in major textile centres.