THE government will provide a subsidy of Rs 2,546 crore to domestic textile firms for upgrading their manufacturing units, textiles Minister Dayanidhi Maran said.
â€œ(The) Rs 2,546 crore worth subsidies will reach the beneficiaries in 72 hours,â€ the minister said at a press conference. The help is extended under the technology upgradation fund scheme (TUFS), which gives 5% interest waiver on bank loans taken by textile companies for buying latest plants and machinery.
The move will give relief to the sector, which is reeling under the impact of a global slump in demand, Mr Maran said. The money will be sufficient to meet requirements of all applicants, who applied under the scheme up to June 30, 2009. â€œThe fund will be transferred electronically through more than 121 financial institutions and banks to the accounts of 12,514 beneficiaries,â€ Mr Maran said.
Units awaiting funds under TUFS have expressed joy over the announcement. Said Arvee Denim MD Ashish Shah, â€œWe were entitled to claim subsidy under TUFS for the last one-and-a-half to two years. We will be able to get the money now.â€
However, some players are unhappy over the governmentâ€™s inaction with respect to solving the problems of export-oriented textile units. â€œTextile exports have increased from China, Bangladesh and Pakistan while shipments from India have declined. Under the circumstances, the government should provide tax relief on inputs to export-oriented units to make them more competitive,â€ said textiles consultant Nayan Parikh.
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