New Delhi, Aug. 29: The popular subsidy programme for the textiles industry — Technology Upgradation Fund Scheme (TUFS) — will continue in the 12th Five Year (2012-17) Plan with the promise of a higher interest subsidy.
The government today approved the continuation of the scheme and has allocated Rs 2,400 crore in this fiscal.
“The total budget outlay for the continuation of the scheme will be about Rs 11,900 crore, of which Rs 2,400 crore has been allocated for 2013-14,” finance minister P. Chidambaram told reporters after a meeting of Cabinet Committee on Economic Affairs.
He said the scheme would boost capital investment in textiles, particularly powerlooms.
A swathe of segments from fibre, yarn to fabric and garments will benefit.
TUFs has lowered the subsidy for second-hand imported shuttleless looms, while raising the benefit for new looms.
Chidambaram said the interest reimbursement on second-hand imported shuttleless looms would be reduced to 2 per cent from 5 per cent.
However, for new shuttleless looms capital subsidy will be raised to 15 per cent from 10 per cent. Interest reimbursement will rise to 6 per cent from 5 per cent and margin money subsidy will be 30 per cent against 20 per cent, with an increase in subsidy cap to Rs 1.5 crore from Rs 1 crore.
Capital subsidy for handloom and silk will be raised to 30 per cent from 25 per cent. In addition, margin money subsidy cap will be increased to Rs 75 lakh from Rs 45 lakh with respect to MSMEs and jute sectors.
The government plans to extend its direct benefit cash transfer for cooking gas connections to 269 districts by January.
“Based on the experience in 20 districts where it has been in place, the cabinet committee on economic affairs has decided to rapidly roll out the DBT (direct benefit transfer) scheme in 269 more districts,” Chidambaram said.