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TUFS Scheme

The Technology Up-gradation Fund Scheme (TUFS) aims to upgrade and modernize the Indian textile industry by encouraging adoption of modern technology and capacity expansion. SIDBI is the nodal agency for implementing TUFS and channelizing subsidies to MSME textile units assisted by co-opted partner lending institutions. Eligible borrowers include new and existing MSME textile units. The amended TUFS (ATUFS) provides capital subsidies up to 30 crore rupees to support installation of benchmarked textile machinery. As of March 2018, SIDBI had settled claims providing 868.73 crore rupees in subsidies to 2904 textile MSME units.

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154 views

TUFS Scheme

The Technology Up-gradation Fund Scheme (TUFS) aims to upgrade and modernize the Indian textile industry by encouraging adoption of modern technology and capacity expansion. SIDBI is the nodal agency for implementing TUFS and channelizing subsidies to MSME textile units assisted by co-opted partner lending institutions. Eligible borrowers include new and existing MSME textile units. The amended TUFS (ATUFS) provides capital subsidies up to 30 crore rupees to support installation of benchmarked textile machinery. As of March 2018, SIDBI had settled claims providing 868.73 crore rupees in subsidies to 2904 textile MSME units.

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maneesh5
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© © All Rights Reserved
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Technology Up-gradation Fund Scheme-Textile Sector(TUFS)

PURPOSE

Upgrade & modernize the Indian Textile Industry by encouraging it to undertake &
adopt modern technological process & or undertake capacity expansion.

Note : The Government Resolution (GR) is available on OTxC site:http://


www.txcindia.gov.in/

The Scheme was launched by the Ministry of Textiles, GoI on April 1, 1999.
Thereafter, the scheme has been modified into various variants, viz., MTUFS,
RTUFS, RRTUFS from time to time. The guidelines of the current scheme, ATUFS
are enumerated below:

The Scheme is implemented and monitored by Office of the Textile Commissioner


(OTxC), Mumbai. Besides SIDBI, IDBI (for non-MSME) and IFCI (for Jute Sector) are
also appointed as Nodal Agency of GoI under TUFS.

Role of SIDBI

• Nodal Agency for MSME in the textile Sector.


• Implementation of the TUF Scheme
• Co-option of PLIs
• Processing of the claims as per extant policy and forwarding to OTxC for the same
claims and release.
• Channelising of subsidy to its co-opted PLIs or release of subsidy to its assisted units

Eligible Borrowers

• New / Existing MSME units


• SME Status as on date of application
• Segment of Textile Industry for the purpose of SSI investment Limit (applicability
in the context of MSMED Act, 2006)

Nodal Agencies

• SIDBI is Nodal Agency for channelising subsidy under TUFS in respect of units
assisted by co-opted PLIs of SIDBI. There are 130 banks in private sector / co-
operative sector / SFCs which are the co-opted PLIs of SIDBI.
• Besides SIDBI, 36 Nodal Banks are designated under TUFS for the cases financed
by them. The name of such 36 banks are available in GoI Resolution dated
04/10/2013.

Scope of the Scheme

TUFS benefit is available for TUFS benchmarked machinery covering the following
activities
a. Cotton ginning and pressing.
b. Silk reeling and twisting.
c. Wool scouring, combing and carpet industry.
d. Synthetic filament yarn texturising, crimping and twisting.
e. Spinning.
f. Viscose Staple Fibre (VSF) and Viscose Filament Yarn (VFY).
g. Weaving, knitting and fabric embroidery
h. Technical textiles including non-wovens.
i. Garment / design studio / made-up manufacturing
j. Processing of fibres, yarns, fabrics, garments and made-ups.
k. Production activities of Jute Industry.

Amended Technology Upgradation Fund Scheme (ATUFS)

GoI (Ministry of Textile), vide its Resolution dated January 13, 2016, has
launched new variant of TUFS scheme - Amended TUFS (hosted on OTxC
website www.txcindia.gov.in).

MoT/ OTxC has since hosted the detailed guidelines of ATUFS on OTxC website
vide, GoI Resolution dated February 29, 2016 (www.txcindia.gov.in).
The salient features of ATUFS are given below:
 Only Capital Subsidy (CS), `30 crore limit, through RoTXC, subsidy to be
disbursed after JIT, etc.
 The date of sanction of TL shall be the date of sanction letter of the Lending
Agency (LA) - however, instructions vary for cases involving down selling of TL/
consortium finance, etc.
 Since the Scheme is credit linked, the entrepreneur would require to keep the
term loan component at a minimum of 50% of the total eligible machinery cost in
the project.
 The new LAs under RRTUFS shall be required to submit their application in the
prescribed format to the Textile Commissioner, Mumbai through i-ATUFS
software, as given in the OTxC website.
 Unit should at least function for the minimum period of TL which should not be for
less than 3 years including moratorium period for Micro & Small units and not
less the 5 years for other categories.
 ATUFS would be implemented by the Textile Commissioner through its Regional /
State Offices (ROTxC). An ROTxC is being set up in each state to implement and
monitor ATUFS. The five-step process for implementation of the Scheme is given
at sl no. 6 (pg 8) of the Resolution.
 The i-ATUFS software shall have pre-authorization system of issuance of TUFS
registration number of receipt of the applications and UID numbers.
 Applicant shall apply for UID within 6 months from the date of sanction letter of
the Term Loan.
 A system of time-bound processing of applications / alerts shall be provided in i-
ATUFS software, as per the timeline given in the OTxC website.
 Preference for applications to install energy saving technology/machinery in
allotment of UID, as per the timeline given in OTxC website.
 Data once submitted by beneficiary and certified by concerned LA shall be
treated as frozen and relaxation / correction, if any, will be permitted / considered
on case to case basis by the Textile Commissioner (TxC) within 1 year from the
date of issuance of subsidy provided there will be no increase in amount of
subsidy.
 A Machine Identification Code (MIC) will be allotted by OTxC which will be a
unique identification number for each machine procured in various projects under
the Scheme.
 After installation / commissioning of the machinery and commencement of
commercial productions, applicant shall inform Joint Inspection Team (JIT)
through i-ATUFS software, within 1 year from date of sanction of TL (extendable
up to 2 years on case to case basis with approval of TxC) for undertaking
physical verification. UID will get automatically cancelled if request for visit to JIT
not given in time.
 Joint Inspection Team (JIT) conducts physical verification and submits report.
 TxC examines JIT Reports and approves, if okay.
 Thereafter, claim is forwarded to Ministry of Textiles (MoT) for release of subsidy.
 Finally, release of subsidy shall be made to Applicant’s account.
 The applicant will have to give declaration indicating subsidy availment under
RRTUFS.
 A Grievance Committee will be set up under chairpersonship of Textile
Commissioner.
Progress Review as on March 31, 2018

As on March 31, 2018, capital subsidy and interest incentive claims for an
aggregate subsidy of Rs. 868.73 crore (cumulative) to 2904 units have been
settled for the MSME units assisted by SIDBI and its co-opted PLIs.

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