The textile industry’s erstwhile growth engine, the Technology Upgradation Fund Scheme (Tufs), may return with renewed vigour in the 12th five-year Plan (2012-17).
“We have proposed the inclusion of Tufs in the 12th Plan and are waiting for in-principle approval from the Planning Commission,” said A B Joshi, textile commissioner. Tufs was re-introduced last year in a revised form, effective April 2011 till March 2012, but, due to recessionary conditions in the industry, it met with poor response. Of a total outlay of Rs 1,972 crore, proposals worth only Rs 200 crore were made. “All of these will be honoured,” said Joshi.
Last year, due to the slowing of major economies like the US and the euro zone, which are export destinations for the Indian textile industry, many companies held back expansion plans.
When the scheme ended, there was talk of extending it for five more years as a part of the 12th Plan but no decision was taken as the five-year document was not finalised and no need was found for reintroducing it in a hurry.
Currently, as Tufs formally got over on March 31, there is a blackout period — meaning, no finance activity is on. So, units with expansion plans have become apprehensive about Tufs’ future and whether they’ll get its benefits again. The industry is currently waiting for clarity from the ministry about its inclusion in the 12th Plan. “Textile players have kept their expansion plans on hold due to the uncertainty,” said an analyst from CARE Ratings. Tufs was first introduced in 1999 and ran till June 2010, then reintroduced in April last year.