The Cabinet on Saturday gave its nod to including the Technology Upgradation Fund Scheme in the 12th five-year Plan and has allocated Rs 11,900 crore for the scheme. The focus of the scheme is the powerloom sector.
In order to reduce imports of second hand shuttleless looms, the interest reimbursement has been reduced to two per cent from five per cent.
The capital subsidy on new shuttleless looms has been raised to 15 percent from 10 per cent, interest reimbursement has been raised to six per cent from five per cent, and margin money subsidy to 30 per cent with an increase in subsidy cap from Rs 1 crore to Rs 1.5 crore.
The capital subsidy for the handloom and silk sectors has been increased to 30 per cent from 25 per cent. Margin money subsidy cap has been increased to Rs 75 lakh in respect of micro, small and medium enterprises and jute sectors.
A cap of 26 per cent has been put on the spinning sector, while caps on all other segments have been removed.
S V Arumugam, chairman of the Confederation of Indian Textile Industry, thanked the central government in general and the textile minister in particular for the announcement of the new scheme and for the improvements incorporated in the scheme.
He observed that a large number of potential investors had been waiting for the announcement of the scheme and the investments would now get into stream.