Loan repayment period for both MSMEs and non-MSMEs revised to three years: Textile Ministry

The Textile Ministry has started to streamline procedures under the Amended Technology Upgradation Fund Scheme (A-TUFS) including a deadline extension for filing applications for verification to make it easier for the industry to benefit from it.

“The textile industry units claiming subsidy can file application for physical verification after installation and commissioning of the machinery, within two years from the date of sanction of term loan, subject to production of documentary proof that the order for machinery was placed within one year,” said a press note of the Ministry of Textiles.

Earlier, the units were required to seek approval for the second year from the Textile Commissioner for extension of timeline beyond one year with proof of pacing order for machinery, the note added.

A-TUFS aims to facilitate employment, investment, quality, productivity as well as import and export substitution in the textile industry while indirectly promoting investments in the manufacturing of machinery for textiles. It is a credit linked subsidy for capital investment in the textiles and manufacturing sectors.

Earler, the textile industry had made representations to the government seeking relaxations in various requirements under A-TUFS because of disruptions caused by the Covid-19 pandemic.

A relaxation has been also been approved in the 88-day timeline prescribed in A-TUFS guidelines for carrying out physical verification of machinery. This is designed to expedite the clearance of backlog verification cases under A-TUFS pending due to the pandemic, the note said. “This exercise will be completed by June 30, 2021,” it added.

The minimum loan repayment period for both MSMEs and non-MSMEs has been revised to three years including the moratorium period, the note said. Earlier, it was five years for non-MSMEs.