Ludhiana textile industry calls new ATUFS anti-small sector and confusing

The Union government’s decision to make amendments in a major scheme related to subsidies forwarded on textile machinery, according to Ludhiana’s textile industry bodies, the move is one that will benefit large enterprises as it is pro-corporate, anti-small sector, and confusing.

The Centre’s Cabinet Committee on Economic Affairs (CCEA) approval to go-ahead with the amendment in Technology Upgradation Fund Scheme (TUFS), removing a portion that gives 30% subsidy on textile machines priced between Rs 75 lakh and Rs 5 crore with the new amendment forwarding 15% subsidy to machines costing up to Rs 30 crore and having no mention of any additional benefit to small-time industrialists.

Harish Dua, president of Knitwear and Apparel Exporters’ Organisation (K.A.M.A.L), said that the decision had been taken to “benefit large enterprises”. The amendments are confusing as they are not clear on whether old benefits would be withdrawn from the small sector. The decision would be a disaster for micro, small and medium enterprises as they were the target category for this scheme. Now, with this support gone, it will be difficult for MSME units to survive.

He accused ministry officials of being callous. The officers themselves are clueless about what does the notification means. All the efforts of the K.A.M.A.L to get an answer from the ministry have turned out to be futile.

The new scheme does not define sub-sectors and only mentions Apparel, Garment and Technical Textiles. According to the scheme, only these three sectors would get 15% subsidy on capital investment, subject to a ceiling of Rs 30 crore for entrepreneurs over a period of five years

Remaining sub-sectors would be eligible for subsidy at a rate of 10 percent, subject to a ceiling of Rs.20 crore on similar lines. These sectors include standalone spinning, weaving, woolen sector, and knitting

In the old scheme, the rates of subsidy were as high as 30% and it covered multiple aspects like standalone spinning, weaving, wool sector, knitting etc. Also, the earlier scheme had ceilings ranging from Rs 75 lakh to Rs 5 crore but now it has been increased up to Rs 30 crore

Bhushan Abbi, president of Home Furnishing and Textile Cluster, went to the extent of warning that the entire textile industry of Punjab to launch a statewide strike by over the decision.

According to Abbi, the amendments would destroy small industrial units. Given the decision that they have taken, it looks like their intention is to do exactly that, he said. The rampant culture of corruption in the offices of textile ministry has made lives textile industry hell. Money is extorted from industrialists for every little work. The government needs to clear the air on this notification.