To replace flagship incentive scheme for capital investments in textiles and garments, Technology Upgradation Fund Scheme (TUFS), and promote integrated manufacturing facilities and technology adoption in a big way, the Government is firming up a Rs. 16,635-crore programme.
The programme is known as The Textiles Technology Development Scheme (TTDS), and will substitute the TUFS that is valid until 31 March 2022.
The beneficiaries of the Rs. 10,683-crore production-linked incentive (PLI) scheme for textiles won’t be able to tap the TTDS.
The draft scheme has two main parts, the first one aims to promote textile machinery manufacturing in India and substitute imports. It proposes to extend incentives of Rs. 5,120 crore over the next five years.
The second part of the scheme proposes incentives of Rs. 4,780 crore for investors willing to set up integrated modern manufacturing facilities. It will also incentivise technology upgrade in existing clusters and micro, small and medium enterprises (MSMEs) at an additional estimated cost of Rs. 2,000 crore over five years.
As per a report of Financial Express, a leading English daily, the new scheme also proposes to settle all pending subsidy claims of eligible beneficiaries of earlier versions of the TUFS, such as Modified TUFS, Restructured TUFS and Revised Restructured TUFS. It proposes to set aside Rs. 2,479 crore for this.
Similarly, it wants all the claims under the current version of the TUFS —Amended TUFS — that was adopted four years ago. It will cost the exchequer Rs. 2,136 crore. These proposals will improve the cash flow of pandemic-hit firms and enable them to spur manufacturing as well as exports.
The new scheme proposes to reimburse 30 per cent of capital investment on textiles machinery and equipment. The companies, which want to set up new integrated units will be offered support to the tune of 25 per cent of capital investment in plants and equipment. Exiting MSME units, too, will get up to 25 per cent capital subsidy.
The incentives, however, are subjected to caps that will be linked to investments.
