The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, cleared the ‘Amended Technology Upgradation Fund Scheme’.
- Under the scheme, apparel, garment and technical textiles will get 15 per cent subsidy on capital investment, subject to a ceiling of Rs.30 crore over a period of five years.
- The remaining sub-sectors will be eligible for 10 per cent subsidy, subject to a ceiling of Rs.20 crore, on similar lines, according to a government statement.
- The amended scheme would give a boost to Make in India in the textiles sector. It is expected to attract investments to the tune of Rs.1 lakh crore and create over 30 lakh jobs.
- The scheme lays emphasis on the promotion of Technical Textiles, a sunrise sector, for exports. It will also encourage better quality in processing industry and check the need for import of fabrics by the garment sector.
- Conversion of existing looms to better technology looms will also receive a major push.for improvement in quality and productivity.
- The new scheme does not cover the spinning sector as there is excess capacity now.
- The new amended scheme aims to plug the loopholes in the earlier scheme and improve Ease of Doing Business.
- The amended scheme will replace the existing Revised Restructured Technology Upgradation Fund Scheme (RR-TUFS) with effect from the date of notification of the scheme.
- The Technology Upgradation Fund Scheme for the textile industry was introduced in 1999 and Rs.21,347 crore has been provided as assistance between 1999 and 2015. Official sources said the ATUFS is expected to attract Rs. 1 lakh crore investment in the next seven years (till 2021-2022).
The textile industry is India’s largest employer after agriculture, accounting for 14% of India’s exports, but has recently lost ground to Bangladesh and Vietnam in the global market as the preferred supplier for readymade garments.