TUFS scheme has been serving as ´Sanjivani´ (Life Giving) for textile sector till date. It was introduced with an aim to boost investments into textile sector.
The main objective was to upgrade the machinery into most modern state-of-the-art technology to face global competition. The scheme helped in fostering the investment across textile value chain over the period of time. Though the TUFS subsidy has boosted the overall investment in textile sector, investors are facing many issues in availing subsidy. TUFS is being catalysing the investment in textile sector, but most of the investors are complaining that availing TUFS subsidy has been a cumbersome job. Delay in getting subsidy from government is one of the major reasons in delay of the project. It also leads in huge loss of money. Some of the common problems faced by textile investors are cumbersome procedure, blackout period & lack of clarity in machineries covered under TUFS.
TUFS is a great initiative started by the Ministry of Textiles (MoT). But inadequate earmarking of funds & lack of co-ordination between nodal agencies is resulting into delay in availing subsidies. MoT should forecast the total investments & required funds outlay for TUFS well in advance for each year. This can be done only when applications for UID reach to the MoT at the planning stage of the project.
Currently, lending agencies are furnishing subsidy requirement on quarterly basis. This can be done on-line basis which will not only avoid accumulation of applications but will make procedure faster. Faster UID generation will help MoT to forecast fund requirements well in advance. This will definitely avoid the inadequate earmarking of funds. Once adequate fund support is available each year, automatically the delays can be shortened by continuous monitoring & further coordination. Moreover, when government is giving TUFS benefits, it is getting much more other benefits on virtue of duties and taxes. Hence, the government should consider it as an investment and not subsidy to the industry.
(Avinash Mayekar is the Managing Director of Suvin Advisors Pvt Ltd, Thane. He can be contacted at: avinash@suvinindia.com).