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No. 28(19)/2003-MS/
Date : 23rd Jan., 2004
Circular No. 7
(2003-2004 Series)

Technology Upgradation Fund Scheme (TUFS)
Credit Linked Capital Subsidy @ 20^0 under TUFS
(CLCS@20%-TUFS ) for Powerloom sector
Operational Guidelines

The government has provided an option to the powerloom units to avail of 20% capital subsidy under TUFS in lieu of 5% interest reimbursement. The operational guidelines of the CLCS@20% TUFS are as follows:
Duration of the scheme
CLCS@20%-TUFS will be in operation from 6th November, 2003 to 31st March, 2007. The loan sanctioned by the lending agencies till the last date of duration of the scheme will be eligible for availing of 20% capital subsidy.
Eligible units
The scheme is applicable to powerlooms in SSI sector only i.e., the units having investment in plant & machinery upto SSI limit. However, SSI registration is not a pre-requisite for availing of assistance under the scheme.
Quantum of subsidy
20% capita! subsidy will be available on investment in TUF compatible specified machinery subjectto a ceiling of Rs.12 lakh on subsidy amount.
Pbwerloom units availing of 20% subsidy would not be eligible under the NEF scheme.
Eligible machinery and fixation of price
The eligible machinery under the scheme include indigenously manufactured semi-automatic looms, automatic looms, shuttleless looms with or without specified loom accessories and specified weaving preparatory machinery.
The new imported looms as well as 2nd hand imported shuttle-less looms as per TUFS norms will also be eligible under the scheme.
The first list of identified manufacturers along with benchmark machinery and benchmark price is fixed by the Textile commissioner as per guidelines issued by the government (Annex-1) is placed atAnnex-II. The 20% capital subsidy would be available on the price of such
indigenous machinery included in the list, or actual invoice price, whichever is lower.
Subsidy limits on second hand imported looms for different models and vintage will be issued separately by the Textile Commissioner.
Review of price of machines
Initial price will be maintained for one year, thereafter it will berevised on the basis of the price revision formula, which will be worked out based on the major constituents of elements ^ T cost. The price revision formula will be worked out and announced separately by Textile Commissioner.
Lending Agency

NBFCs registered with RBIs as category A and B, all banks including co-operative banks / SFCs /SIDCs and SIDBI are eligible for funding under the scheme,

Financial norms
Financial norms like period of loan, moratorium period, security debt- equity ratio, previous years profit position, networth etc. will be as per existing norms of lending agency. However, they should not be stricter than TUF norms.
In addition to term loan eligible powerloom units can also avail of financial assistance under lease financing and hire- purchase schemes of the lending agencies.
Release of subsidy to the machinery manufacturers
The powerloom unit will approach the lending agency for a term loan with their project proposal. The lending agency would advise the office of the Textile Commissioner of the sanction of the loan i in the prescribed format as at Annex-Ill.
The powerloom entrepreneur would release his initial advance of 15% contribution directly to the machinery manufacturer. The lending agency would release the loan to the machinery manufacturer when machinery are ready for dispatch. In case, with the loan amount, 80% of the cost of the machinery is not met, the powerloom weaver would make good the remaining amount to the machinery manufacturer from his own resources.
The machinery manufacturer/powerlooi-n entrepreneur would install and commission the loom on receiving 80% of the cost of the machinery. After satisfactory commissioning of the loom, the machinery manufacturer would inform the office of the Textile Commissioner
In case of imported machinery, the powerloom weaver would inform the office of the Textile Commissioner after commissioning of the looms.
Textile Commissioner would constitute inspection teams on regional basis to inspect and certify the commissioning of the machinery, It would be ensured that Certification Committee issues a certificate within 15 days from date of intimation by the machinery manufacturer.
The 20% subsidy would be released by the office of the Textile Commissioner to the machinery manufacturers after issue of certification from the inspection team. The office of the Textile Commissioner would ensure that 20% subsidy is released within 15 days of issue of the certificate by the Certification Committee.
In respect of TUPS compatible imported looms and machinery, the powerloom weavers will need to open a LC in Bank to make the purchase. In such cases, the 20% subsidy would be released directly to the powerloom weaver's bank account after receiving installation and commissioning report of the imported looms and machinery.
In case powerloom entrepreneur avails of bridge finance from the lending agency for the 20% capital subsidy to be given, the 20% subsidy would be released by the Textile Commissioner directly to the lending agency.
In case machinery is being installed/commissioned in phases, the subsidy shall also be released in phases.
Textile Commissioner would also constitute a team comprising of senior officers of the Head office to periodically inspect on random basis, the machinery installed /commissioned.
Safeguard against mis-utilisation
To prevent mis-utilisation of the scheme, casting of a unique mill no. and engraving (of not < 2 mm depth) of the running serial number would be done on each machine. There would be a nine digit identification code for each machinery. The nine digit identification code will include the following:
* The first three digits (000) af the identification code will indicate unique three digit mill     No. for each manufacturer which has been allotted by the Textile Commissioner as     mentioned in col-3 in Annex-11. The unique three digit mill no. will be casted in the     specified cast components by the machinery manufacturers.
* The next two digits (00) of the identification code will indicate the type of the     machinery. The two digit number for different type of machinery has been specified by     the Textile Commissioner. The details of the two digit numbers are given in the     Annex^IV The two digit number is to be engraved (of not < 2 mm depth) besides     three digit unique mill number on each machinery.
* The next four digits (0000) will indicate number of machinery of that manufacturer     produced under the scheme. The four digit running serial No. for each type of     machinery will be given by the respective machinery manufacturer and is to be     engraved (of not < 2 mm depth) besides three digit unique mill number and two digit     number specified by the Textile Commissioner for that machinery.
For example the nine digit identification code for first semi-automatic loom produced under the scheme by M/s Honest Trading Co. Pvt. Ltd., would be'017010001' The first three digits '017' indicate the unique mill number of M/s Honest Trading Pvt. Ltd.; the next two digit '01' indicate the type of machinery i.e., semi-automatic loom; the next four digit '0001' indicate the first semi-automatic loom produced by M/s Honest Trading Company under the Scheme. Likewise the nine digit identification code for 1st rapier loom produced under the scheme by M/s Lakshmi Textile Stores would be '0010400QL'. The first three digits '001' indicate the unique mill number of M/s Lakshmi Textile Stores; the next two digit '04' indicate the type of machinery i.e., rapier loom; the next four digit '0001' indicate the first rapier loom produced by M/s Lakshmi Textile Stores under the Scheme.
The identified machinery manufactures would cast the 3 digit unique mill No. on the select cast components as specified by the Textile Commissioner. The item-wise specified components for casting are at Annex-V. The two digit machinery No. specified by the Textile Commissioner and the four digit running S.No. would be engraved (of not < 2
mm depth) on the machine on such cast components, besides the mill No.
For specified machinery which have no cast components engraving (of not < 2 mm depth) of unique mill no. instead of casting of such no, is permitted by the Textile Commissioner.
For the existing stock of the machinery manufacturers, the stock declaration statement as on date of launch of the scheme would be submitted by the machinery manufacturers to Shri S.Chakravarthy, Director, Powerlooms. Based on the quantum of such stock, the Textile Commissioner would take a decision regarding coverage of such stock under scheme by permitting engraving (of 2 mm depth) of the unique mil! nos. on such stock.
Monitoring of the progress of the scheme
The TAMC will monitor the progress of the scheme.
Grievance Committee

Grievance of the weavers after purchase of machinery under the scheme would be considered by a grievance committee under the chairmanship of the Textile Commissioner comprising of one representative each of Weavers Association and FITEI
The operational guidelines of CLCS-TUFS@20% may please be brought to the notice of all

(Smt, Shashi Singh)

To: -
1. Ail Bench marked Machinery Manufacturers
2. Secretaries (Textiles) of all states
3. All Banks, NBFCs, SFCs, SIDCs,
4. To all Major Textile Industry Associations/ Trade Associations/All India Industry     Associations/ Chambers of Commerce & Industry.
5. Officer Incharge of ail Regional office of the Textiie Commissioner,
6. Secretary, Textiles Committee, Mumbai
7. Officer Incharge of all Pawerloom Service Centers,
8. The Directors of all TRAs
9. Executive Directors of all EPCs
10. Development Commissioner (Handlooms)
11. Development Commissioner (Handicrafts)
12. Jute Commissioner
13. Member-Secretary, Central Silk Board
14. Director General , N1FT
15. Prominent News Agencies.
    With a request to bring the above message to the notice of all concerned, by     publishing / covering the above amendments/modifications in the TUFS, in the news     papers/ periodicals / magazines etc.
Copy for information to:

1. All members of 1MSC & TAMC.
2. Shri Atul Chaturvedi, Joint Secretary, Ministry of Textiles. New Delhi
3. Smt- Kiran Dhingra, Joint Secretary, Ministry of Textiles, New Delhi
4. Shri C. Rout, Director, Ministry of Textiles, New Delhi

(Smt. Shashi Singh)

History --------------------01 Photo Gallery -------------------03 Activities -------------------05
Catalogue ----------------02 Textile Industries --------------04 Surat -----------------------06
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