New Delhi, Nov 07: The Union Cabinet on Thursday cleared a proposal announced by the finance ministry earlier to increase the direct capital subsidy available for the modernisation of the decentralised weaving sector of the textile industry from the present 12% to 20%, up to a maximum of Rs 50 lakh per unit. This will be available as an additional option under the technology upgradation fund scheme (TUFS) for the textile industry, which otherwise provide for a 5% interest incentive, the cost of which is borne by the government.

Also, the powerloom workers would be covered under a special insurance scheme covering death, accident and disability. The package would include measures aimed to increase the sources of credit to powerlooms by inclusion of cooperative banks and “genuine NBFCs” in the network.
The new option of direct capital subsidy under the TUFS is being introduced, considering the fact that powerloom sector has not been able to avail of the TUFS benefit under the eligibility parameters of the lenders. Powerlooms have so far been able to avail of only 2.12% of the credit sanctioned under the TUFS. Bureau Report