The Union government is looking to re-introduce the Technology Upgradation Fund Scheme (Tufs) with some tweaks; states might be asked to fund it. They are also looking for a long term policy perhaps for at least 10 years, in the new textile policy, scheduled to be out by month-end, said Sanjay Kumar Panda, Secretary, ministry of textile on Thursday.

In the revised policy, the onus of funding the sector is likely to be put on the states where factories exist. As, the states’ share in central taxes has been increased to 42 percent from 32 per cent earlier.

Tufs, implemented from April 1999, was introduced to catalyze investments in the textile and jute industry, with a five percent interest reimbursement. The scheme was initially approved from April 1999 to March 2004, extended to 2007 with modifications and further restructured with effect from April 2011, to March 2012.

The government started with a capital subsidy when it was introduced in 1999. Later, the mode of relief was changed to interest subvention.

In 2012, then commerce minister Anand Sharma announced its continuation for the 12th Plan period of 2012-17, with an outlay of Rs 11,900 crore. Of this, Rs 6,000 crore has been released so far.

Panda further said that they will ask for the remaining Rs 6,000 crore for the rest of the Plan period. Depending upon the money available, the ministry will take a final decision on allocation in the various sectors.

The industry utilised Rs 12,383 crore against the budgetary allocation of Rs 13,785 crore during the 11th Plan. Restructured Tufs allocations did not prescribe sectoral ceilings for the spinning, powerloom and handloom sectors. Investments in spinning were Rs 34,347 crore and in the weaving sector, including powerlooms and handlooms, Rs 9,750 crore.

According to Kiran Soni Gupta, textile commissioner, they are trying to push for Tufs very aggressively after looking at the scheme’s success in the past. However, its nature and allocation is yet to be decided.