TUF scheme had been operating quite effectively over the last few years since its launch in the year 1999 and has been instrumental in fueling modernisation and capacity expansion in the textile industry. However it has practically come to a standstill now due to funds shortage at the government end. The budget allocation for 2015-16 has been Rs 1,520 crore but will be basically used to cover only the pending disbursement cases during the blackout period of 10 months of 2010-11 and it will not be able to meet the disbursements made during the year. Moreover this year´s TUFS budget has been lower compared to the earlier year.
In line with the ´Make in India´ initiative of the Prime Minister Narendra Modi, TUF scheme needs to be made more effective by sorting out all the scheme drawbacks, the pending issues and the implementation problems. It needs to be re-launched with proper clarity and with a strong focus on fabric and garment sector related initiatives. This is especially important as weaving and processing sectors are still lacking the required infrastructure and need big investments in technology. Also garment industry needs a support in building big capacities to cater to the huge demand from the export markets. The need of the industry for the much required working capital at reduced interest cost can help immensely if addressed through TUF.
(G V Aras is Director with ATE Enterprises Pvt Ltd, Mumbai. He can be contacted at: g_v_aras@ateindia.com)