Technological upgradation fund scheme (TUFS) was launched in 1999 with the objective of providing credit and capital subsidy to textile and clothing industries to modernise the textile units. This was given to help in enhancing the labour and capital productivity and enhance production of high quality products.
Initially it was for five years, however subsequently looking at the demand from various quarters of sector and its importance in India’s economy and manufacturing sector, the scheme was extended. It was extended under the various names like restructured- technological upgradation fund scheme (RTUFS), restructured and revised technological upgradation fund scheme (RRTUFS) and amended-technological upgradation fund scheme (A-TUFS). Scheme has been re-launched in 2016 with the name of A-TUFS.
Following are the major objectives of the A-TUFS:
- In order to promote ease of doing business in the country and achieve the vision of generating employment and promoting exports through ‘Make in India’ with ‘Zero effect and Zero defect’ in manufacturing. A-TUFS has been launched to provide credit linked capital investment subsidy (CIS) to T&C sector.
- The scheme would facilitate augmenting of investment, producitivty, quality, employment, exports along with import substitution in the textile industry. It will also indirectly promote investment in textile machinery (having benchmarked technology) manufacturing
A-TUFS benefit is available for the benchmarked machineries under the scheme covering the following activities: weaving, weaving preparatory and knitting; processing of fibres, yarns, fabrics, garments and made-ups; technical textiles; garment/rnade-up manufacturing; handloom sector; silk sector and jute.
The capital investment subsidy under ATUFS has been made available for investment on eligible benchmarked machinery in the specified segments. Eligible benchmarked machinery has been updated by OTC on April 1 2016. Machinery purchased directly from the machine manufacturers or their authorised agents will be considered for benefits under the scheme. However, the benefit would also be available to the garmenting machinery purchased. Following are the eligibility conditions of A-TUFS:
- Entities/units registered under the Companies Act, 1956 or under the Companies Act 2013 or under the Companies Act 2015 or as per provisions in the amendments of the said Acts with the registrar of the companies, which have an acknowledgment of the industrial entrepreneur memorandum (IEM) with the Department of Industrial Policy and Promotion except MSME units, which will be as per the instructions of the Ministry of MSME or units which are registered with concerned directorates of the State Government showing clearly the activity for which the unit is registered will only be eligible to get benefit under this scheme. In case of non-MSME units, existing units and new units will be eligible for subsidy within the overall ceiling fixed for an individual entity. However, in case the entity has availed subsidy under RRTUFS, it will be eligible for only the balance amount within the overall ceiling fixed for an individual entity.
- Textile units including handloom, silk, jute units are eligible to get benefits under this scheme
Type of eligible textile machinery:
- Under the ATUF scheme, only new benchmarked machinery for the specified segments indicating the names of the manufactures or their authorised agents shall be finalised and notified every year as on April 1 by the TAMC.
- Accessories/attachments/sample machines/spares received along with the machinery up to a value of 20 per cent of the machinery cost ceiling under ATUFS will also be eligible.
- Machinery eligible for one segment is eligible for other segments/activities also unless its eligibility is specifically restricted for a particular segment activity.
- Eligibility of any other textile machinery not notified by Textile Commissioner for the year as on April 1 may also be included subsequently on the recommendation of TAMC, if considered essential.
- The issuance of unique identification numbers will be linked to the list of bench machinery eligible for subsidy under the scheme which will be revised based on the budgetary provisions and liabilities and recommendations of the TAMC every year
- Machinery (imported and indigenous) purchased directly from the machine manufactures or their authorised agents will be considered for benefit under the scheme. Under no circumstances, the machinery which has been used even once and/or even for testing purpose will be allowed under this scheme.