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Technology Upgradation Fund Scheme-Textile Sector

• The Scheme was launched by the Ministry of Textiles, GoI on April 1,1999
• SIDI is the nodal a!ency for the SSI in the textile and cotton !innin! and
pressin! sector"
Role of SIDBI
• Implementation of the T#$ Scheme
• %o&option of '(Is
• )xamination of eli!ibility from T#$S an!le
• %hannelisin! of subsidy to its co&opted '(Is or release of subsidy to its
assisted units
• $unds Maintenance
• 'olicy interpretation&*ueries in consultation with the +ffice of Textile
%ommissioner
Objectie of the Scheme
• #p!rade , modernise the Indian Textile Industry by encoura!in! it to
underta-e , adopt modern technolo!ical process , or underta-e capacity
expansion"
S!O"# OF T$# S!$#%#
The Scheme co.ers the followin! se!ments /
– 0ool scourin! and combin!
– Synthetic filament yarn texturisin!, crimpin! and twistin!
– Spinnin!
– 1iscose Staple $ibre , 1iscose $ilament 2arn 31$24
– 0ea.in!, -nittin! includin! non&wo.ens, fabric embroidery
Garment5Made&up manufacturin!5Desi!n studio
– 'rocessin! of fibres, yarns, fabrics, !arments and made&ups
– Sil- reelin! and twistin!
– Technical Textiles , 6on&wo.ens
– %otton Ginnin! , 'ressin!
&ature of unit 'Type()
• )xistin! unit with or without expansion
• 6ew units with appropriate eli!ible technolo!y
• SM) Status as on date of application
• Se!ment of Textile Industry for the purpose of SSI in.estment (imit
3applicability in the context of MSM)D Act"78894
TUFS Objectie * Incentie(
• Incenti.es
&o+ in the preface and recognition of the aboe, the -oernment re(ole(
to further continue the Technology Upgradation Fund Scheme for the
textile( * jute indu(trie( +ith effect from ./0.102..3 upto 4/0.402./2 and to
proide the financial and operational parameter( of the Scheme in re(pect
of loan( (anctioned +ith effect from ./0 .102..3 a( follo+(5-
i4" 6 reimbur(ement of 78 on the intere(t charged by the lending
agency on a project of technology upgradation in conformity +ith
the Scheme0 $o+eer, for (pinning machinery the (cheme +ill
proide 18 for ne+ (tand alone 9 replacement 9 moderni(ation of
(pinning machinery: and 78 for (pinning unit( +ith matching
capacity in +eaing 9 ;nitting 9 proce((ing 9 garmenting0
ii)0 !oer for foreign exchange rate fluctuation 9 for+ard coer premium
not exceeding 78 for all (egment( except for ne+ (tand alone 9
replacement 9 moderni(ation of (pinning machinery, the foreign
exchange rate fluctuation 9 for+ard coer premium +ill be 180
iii)0 6dditional option to the po+erloom( unit( and independent
preparatory unit( to aail of 2.8 %argin %oney (ub(idy under
Re(tructured TUFS in lieu of 78 intere(t reimbur(ement on
ine(tment in TUF compatible (pecified machinery (ubject to a
capital ceiling of R(0 7.. la;h and ceiling on margin money (ub(idy
of R(0<. la;h0 $o+eer, for brand ne+ (huttlele(( loom( the ceiling
on margin money (ub(idy +ill be R(0/ crore0 6 minimum of /78
e=uity contribution from beneficiarie( +ill be en(ured0
i)0 6n option to SSI textile and jute (ector to aail of /78 %argin %oney
(ub(idy in lieu of 78 intere(t reimbur(ement on ine(tment in TUF
compatible (pecified machinery (ubject to a capital ceiling of R(0 7..
la;h and ceiling on margin money (ub(idy of R(017 la;h0 6 minimum
of /78 e=uity contribution
from beneficiarie( +ill be en(ured0
)0 78 intere(t reimbur(ement plu( /.8 capital (ub(idy for (pecified
proce((ing, garmenting and technical textile machinery0
i)0 The !ommon #ffluent Treatment "lant( '!#T"() +ill not be coered
under Re(tructured TUFS0
ii)0 78 intere(t reimbur(ement plu( /.8 capital (ub(idy for brand ne+
(huttlele(( loom(0
iii)0 Intere(t (ub(idy9capital (ub(idy9%argin %oney (ub(idy on the ba(ic
alue ofthe machinerie( excluding the tax component for the
purpo(e of aluation0
ix)0 278 capital (ub(idy in lieu of 78 intere(t reimbur(ement on
purcha(e of the ne+ machinery and e=uipment( for the pre-loom *
po(t-loom operation(, handloom(9up-gradation of handloom( and
te(ting * >uality !ontrol e=uipment(, for handloom production
unit(0
x)0 278 capital (ub(idy in lieu of 78 intere(t reimbur(ement on
benchmar;ed machinery of (il; (ector a( applicable for $andloom
(ector0
xi)0 The Scheme +ill coer only automatic (huttlele(( loom( of /. year(?
intage and +ith a re(idual life of minimum /. year(0 The alue cap
of the automatic (huttlele(( loom( +ill be decided by the Technical
6di(ory-cum-%onitoring !ommittee 'T6%!)0
xii)0 Ine(tment( li;e factory building, pre-operatie expen(e( and
margin money for +or;ing capital +ill be eligible for benefit of
reimbur(ement under the (cheme meant for apparel (ector and
handloom +ith 7.8 cap0 In ca(e apparel unit 9 handloom unit i(
engaged in any other actiity, the eligible ine(tment under thi( head
+ill only be related to plant * machinery eligible for manufacturing of
apparel 9 handloom(0
xiii)0 Intere(t reimbur(ement +ill be for a period of 3 year( including 2
year( implementation 9 moratorium period0
xi)0 The (ub(idy in re(tructured ca(e( +ill be re(tricted to the =uantum
approed in the initial loan repayment (chedule by the lending
agency and (ubmitted to the Office of the Textile !ommi((ioner in
the pre(cribed format0
x)0 !ommon #ffluent Treatment "lant '!#T") and other ine(tment( li;e,
energy (aing deice(, in-hou(e R*D, IT including #R", T>%
including adoption of ISO 9 BIS (tandard(, !"" and electrical
in(tallation( etc0 +ill not be eligible under Re(tructured TUFS0
xi)0 There +ill be an oerall (ub(idy cap of R(0 /@32 crore( from the date
of thi( Re(olution to 4/0.402./2, +hich i( expected to leerage an
ine(tment of R(01<@.. crore, +ith (ectoral ine(tment (hare( of
2<8 for (pinning, /48 for +eaing, 2/8 for proce((ing, A8 for
garmenting and 428 for other(0
xii)0 The Scheme +ill be admini(tered +ith a t+o (tage monitoring
mechani(m a( detailed in "ara IB0 The (ectoral cap( may be
reie+ed for modification by the I%S! 'Inter %ini(terial Steering
!ommittee), ba(ed on the recommendation( of T6%0
%onitoring "roce((
'i) There +ould be an online pre-authori(ation (y(tem for each eligible
application by the Textile !ommi((ioner, %umbai0 Applications
would be processed on a first come first served basis, subject to
eligibility and availability of funds.
(ii) For obtaining a Unique I number, t!e nodal ban"s # nodal agencies
# coopted $%Is will submit information online in t!e prescribed
format to t!e &e'tile (ommissioner, )umbai, after determination of
eligibility and admissible amount under *estructured &UF+ for eac!
case. &!e format for applying for unique I number is at Anne' , U.
&!e lending agencies are required to furnis! quarter-wise subsidy
requirement for entire period of . years or actual period w!ic!ever is
lower. /uarter-wise interest reimbursement # capital subsidy will be
restricted to t!e quantum as submitted in t!is format to t!e 0ffice of
t!e &e'tile (ommissioner. /uarter-wise interest reimbursement #
capital subsidy can be lower t!an t!e amount given in t!is format
but cannot be !ig!er t!an t!is amount.
(iii) 0n receipt of t!e information in t!e prescribed format, t!e &e'tiles
(ommissioner )umbai will issue a Unique I number to pre-
aut!ori1e t!e loan application for submission of subsidy claim by
t!e lending agency.
'i) 6ny application (anctioned by the Ban; +ithout the Uni=ue ID
number by the Textile( !ommi((ioner, %umbai +ould not be eligible
for relea(e of (ub(idie( under the Re(tructured TUFS (cheme0
') The Textile( !ommi((ioner +ill (top preauthoriCation a( (oon a( the
aailable ine(tment 9 (ub(idy cap i( reached in each (egment, a(
mentioned in para <'xi)0
"rogre(( Reie+ a( on December 4/, 2./2
• 6( on December 4/, 2./2 , /4.034 la;h ha( been relea(ed to SIDBI?(
directly a((i(ted ca(e( numbering A730
DDDDDDD
Now in the preface and recognition of the above, the Government
resolves that the
Restructured Technology Upgradation Fund Scheme for the textiles
!ute
industries will be in operation with e"ect from the date of this
resolution upto
#$%&#%'&$'% The (nancial and operational parameters of the
Restructured TUFS in
respect of loans sanctioned under the scheme would be as follows) *
i+% , reimbursement of -. on the interest charged by the lending
agency on a
pro!ect of technology upgradation in conformity with the Scheme%
/owever, for
spinning machinery the scheme will provide 0. for new stand alone 1
replacement 1 modernisation of spinning machinery2 and -. for
spinning units
with matching capacity in weaving 1 3nitting 1 processing 1 garmenting%
ii+% 4over for foreign exchange rate 5uctuation 1 forward cover premium
not
exceeding -. for all segments except for new stand alone 1
replacement 1
modernisation of spinning machinery, the foreign exchange rate
5uctuation 1
forward cover premium will be 0.%
#
iii+% ,dditional option to the powerlooms units and independent
preparatory units to
avail of '&. 6argin 6oney subsidy under Restructured TUFS in lieu of
-.
interest reimbursement on investment in TUF compatible speci(ed
machinery
sub!ect to a capital ceiling of Rs% -&& la3h and ceiling on margin money
subsidy of Rs%7& la3h% /owever, for brand new shuttleless looms the
ceiling
on margin money subsidy will be Rs%$ crore% , minimum of $-. e8uity
contribution from bene(ciaries will be ensured%
iv+% ,n option to SS9 textile and !ute sector to avail of $-. 6argin
6oney subsidy
in lieu of -. interest reimbursement on investment in TUF compatible
speci(ed machinery sub!ect to a capital ceiling of Rs% -&& la3h and
ceiling on
margin money subsidy of Rs%0- la3h% , minimum of $-. e8uity
contribution
from bene(ciaries will be ensured%
v+% -. interest reimbursement plus $&. capital subsidy for speci(ed
processing,
garmenting and technical textile machinery%
vi+% The 4ommon :;uent Treatment <lants =4:T<s+ will not be covered
under
Restructured TUFS%
vii+% -. interest reimbursement plus $&. capital subsidy for brand new
shuttleless
looms%
viii+% 9nterest subsidy1capital subsidy16argin 6oney subsidy on the
basic value of
the machineries excluding the tax component for the purpose of
valuation%
ix+% '-. capital subsidy in lieu of -. interest reimbursement on
purchase of the
new machinery and e8uipments for the pre*loom post*loom
operations,
handlooms1up*gradation of handlooms and testing >uality 4ontrol
e8uipments, for handloom production units%
x+% '-. capital subsidy in lieu of -. interest reimbursement on
benchmar3ed
machinery of sil3 sector as applicable for /andloom sector%
xi+% The Scheme will cover only automatic shuttleless looms of $&
years? vintage
and with a residual life of minimum $& years% The value cap of the
automatic
shuttleless looms will be decided by the Technical ,dvisory*cum*
6onitoring
4ommittee =T,64+%
xii+% 9nvestments li3e factory building, pre*operative expenses and
margin money
for wor3ing capital will be eligible for bene(t of reimbursement under
the
scheme meant for apparel sector and handloom with -&. cap% 9n case
apparel
unit 1 handloom unit is engaged in any other activity, the eligible
investment
under this head will only be related to plant machinery eligible for
0
manufacturing of apparel 1 handlooms%
xiii+% 9nterest reimbursement will be for a period of @ years including '
years
implementation 1 moratorium period%
xiv+% The subsidy in restructured cases will be restricted to the
8uantum approved in
the initial loan repayment schedule by the lending agency and
submitted to the
ABce of the Textile 4ommissioner in the prescribed format%
xv+% 4ommon :;uent Treatment <lant =4:T<+ and other investments
li3e, energy
saving devices, in*house RC, 9T including :R<, T>6 including
adoption of
9SA 1 D9S standards, 4<< and electrical installations etc% will not be
eligible
under Restructured TUFS%
xvi+% There will be an overall subsidy cap of Rs% $E@' crores from the
date of this
Resolution to #$%&#%'&$', which is expected to leverage an investment
of
Rs%07E&& crore, with sectoral investment shares of '7. for spinning,
$#. for
weaving, '$. for processing, F. for garmenting and #'. for others%
xvii+% The Scheme will be administered with a two stage monitoring
mechanism as
detailed in Para IV% The sectoral caps may be reviewed for
modi(cation by
the 96S4 =9nter 6inisterial Steering 4ommittee+, based on the
recommendations of T,6
IV. IMPLEMENTATION/MONITORING/APPRAISAL MECHANISM
1. Stage I of Monitoring Process
=i+ There would be an online pre*authorisation system for each eligible
application by the Textile 4ommissioner, 6umbai% ,pplications would
be
processed on a (rst come (rst served basis, sub!ect to eligibility and
availability of funds%
=ii+ For obtaining a Uni8ue 9C number, the nodal ban3s 1 nodal agencies
1 coopted
<G9s will submit information online in the prescribed format to the
Textile 4ommissioner, 6umbai, after determination of eligibility and
admissible amount under Restructured TUFS for each case% The format
for
applying for uni8ue 9C number is at Annex !. The lending agencies
are
re8uired to furnish 8uarter*wise subsidy re8uirement for entire period
of @
years or actual period whichever is lower% >uarter*wise interest
reimbursement 1 capital subsidy will be restricted to the 8uantum as
submitted
in this format to the ABce of the Textile 4ommissioner% >uarter*wise
interest
reimbursement 1 capital subsidy can be lower than the amount given in
this
format but cannot be higher than this amount%
=iii+ An receipt of the information in the prescribed format, the Textiles
4ommissioner 6umbai will issue a Uni8ue 9C number to pre*authoriHe
the
loan application for submission of subsidy claim by the lending agency%
=iv+ ,ny application sanctioned by the Dan3 without the Uni8ue 9C
number by the
Textiles 4ommissioner, 6umbai would not be eligible for release of
subsidies
under the Restructured TUFS scheme%
=v+ The Textiles 4ommissioner will stop preauthoriHation as soon as the
available
investment 1 subsidy cap is reached in each segment, as mentioned in
para 7=xvi+%