Technology Upgradation Funds

Search form

Refinance Scheme For Textile Industry Under Technology Upgradation
Fund (RTUF)

Objective

To provide encouragement to textile industrial units (including units in the Cotton Ginning and Pressing sectors) in the small scale sector for taking up technology upgradation and to modernise their production facilities. The scheme envisages interest incentive of 5 percentage points on the loans availed by small scale units from eligible Primary Lending Institutions (PLIs) for undertaking technology upgradation / modernisation. New units being set up with technology as per the guidelines of the scheme would also be eligible for the above incentive.

However, availment of Refinance from SIDBI is not compulsory in respect of SFCs, Scheduled Commercial Banks and select co-opted Co-operative Banks. In case Refinance is availed from SIDBI, such proposals shall conform to norms and parameters stipulated by SIDBI in addition to the guidelines prescribed by GoI.

Purpose

Assistance under the scheme would be available for installation of specified types of machinery (to fall in line with definition laid down by Government of India (GOI) for technology upgradation) in a new unit or in an existing unit by way of replacement of existing machinery and / or expansion will be eligible for coverage under RTUF scheme (details of list of machinery are furnished in Section 4 of Technology Upgradation Fund Scheme booklet issued by GOI)
 

i] The following investments will also be eligible to the extent necessary for the plant and equipment to be installed for Technology Upgradation and the total of such investments will not normally exceed 25% of the total investment in such plant and machinery:  

a) Land and factory building including renovation of  factory building and electrical installations.

b) Energy saving devices

c) Effluent treatment plant (ETP)

d) Water treatment plant for captive industrial use

e) Captive power generation

Purpose

ii]Investments in the installation of the following facilities including necessary equipment:
 

a) In-house R & D including designs studio

b) Information Technology including ERP.

c) Total quality management including adoption of appropriate ISO/BIS standards.
 

iii] Investment in the acquisition of technical know-how.
 

Lending in excess of the limits prescribed above in respect of these items will attract the normal lending rates.
 

Investments in common infrastructure facilities owned by the association, trust or co-operative society of the units participating in the RTUF scheme, to the extent necessary for this purpose, including the following :
 

i)Common utilities, viz. water supply, power substation, etc
 

ii)Common captive power generation
 

iii)Common effluent treatment plant
 

Any additional investments would attract the normal lending rates

Eligible Borrowers

Sole Proprietorships, Partnerships, Co-operative Societies, Private and Public Limited Companies in the textile and cotton ginning and pressing industries. The textile industry comprises the following activities:
 

a) silk reeling and twisting,
 

b) wool scouring and combing,
 

c) synthetic filament yarn texturising, crimping and twisting,
 

d) spinning,
 

e) viscose filament yarn (VFY),
 

f) weaving, knitting including non-wovens, fabric embroidery and technical textiles,
 

g) garment/ made-up manufacturing,
 

h) processing of fibres, yarns, fabrics, garments and made- ups

Norms

The scheme would be in operation for a period of five years from April 1, 1999 to March 31, 2004.
 

Refinance from SIDBI is not compulsory (except for State Co-opeative Banks and other Scheduled Co-operative Banks). However, where refinance is availed from SIDBI such proposals shall conform to norms and paramaters stipulated by SIDBI, in addition to the guidelines prescribed by Government of India (GOI).
 

Amount of loan - need based
 

Promoters' contribution - Minimum 20% of the project cost
 

DER - Shall not be more than 2 : 1 for the unit as a whole
 

Further details are furnished in Technology Upgradation Fund Scheme booklet issued by GOI