The apex body of textile mills in the South, Southern India Millsâ€™ Association has appealed to the Union Government to release additional funds of Rs. 5,500 crore for the Technology Upgradation Fund Scheme to clear the dues (subsidy amount) that need to be paid to the textile units under the scheme.
Hundreds of textile units in the country would be shut down if the Technology Upgradation Fund (TUF) subsidy is not released on time, said SIMA.
Association chairman M. Senthil Kumar said on Thursday that the budgetary allocation in the 2016-17 budget for TUF scheme is only is Rs. 1,480 crore. The actual requirement however, is Rs. 7,000 crore and sought allocation of the balance fund of Rs5,500 crore to meet the liabilities of the backlog period.
Disbursement of subsidy under the scheme has been cleared only till August 2014 and textile units are waiting for the subsidy amount from September 2014.
Though the cabinet committee has approved extension of the scheme, the required amount has not been allocated to clear the dues.
Association Chairman M Senthilkumar has in a communication to Union Finance Minister appealed for immediate allocation of adequate funds for clearing TUF subsidy backlog since September 2014.
Allotment of required funds without delay would prevent hundreds of textile from defaulting on loan payments, considering that the industry has been facing a recession since April 2014.
There has been complete erosion of working capital and a good number of textile units have started to incur cash losses due to glut in the market.
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