IMSC has effected a number of modifications and relaxations in the technology and financial norms of the Technology Upgradation Fund Scheme (TUFS) based on the recommendations of TAMC (formerly TAC). Though, some of the modifications / relaxations effected are included in the earlier circulars issued by this office, it has been thought appropriate to issue a comprehensive circular containing all such modifications effected since the inception of the scheme upto 31.07.2000 in the Govt. Resolution No.28/1/99-CTI, dated 31.03.1999 on TUFS. The same are given below:

1. Cut off date under TUFS

The Govt. has decided that the loans which have been sanctioned prior to 1.4.99 but not disbursed will be reconsidered under TUFS as fresh cases if otherwise they meet the parameters of TUFS. In case of part disbursed loans, the existing loan cases will have to be terminated and the remainder of the investment conforming to TUFS norms may be considered as a fresh project by the lending agencies. However, the Nodal Agencies and the co-opted PLIs may consider at their discretion the remainder of the project under TUFS without formal termination if the remainder project otherwise conforms to TUFS technology norms.


2. Minimum Economic Size (MES)

The Govt. has decided to reduce the Minimum Economic Size (MES) in respect of cotton ring spinning system. For the units having 12000 or more spindles and with consistently good management and financial performance track record, the nodal/lending agency, at its discretion, may sanction a technology upgradation project even without topping the spindleage to 25000, provided post modernisation, the unit is economically viable. Units with less than 12000 spindles must top it upto a minimum of 12000 spindles or more, subject to a good management and financial track record and fulfilment of the condition of investment in downstream permissible value addition activities. However, new units will be allowed only at a minimum of 25000 spindles subject to fulfilment of other conditions of TUFS. In respect of other eligible segments of the industry, the MES should be any unit which is financially viable as per viability analysis of the financial institutions or banks


3. Import of second hand Machinery

The following imported second hand machinery for jute & textile sector would be eligible under TUFS:
i) Machinery for jute industry (i.e. jute softening and carding, drawing, spinning and weaving) with a minimum residual life of 10 years subject to a maximum expired life of 10 years
ii) Air jet and Water jet shuttleless looms of upto 5 years' vintage and with a residual life of minimum 10 years.
iii) Projectile and Rapier shuttle-less looms with or without high speed direct beam warper with creel and/or sectional warping machine with auto stop and tension control of uptp 10 years' vintage and with a residual life of minimum 10 years.
iv) Second hand worsted sector machinery of upto 10 years' vintage and with a residual life of minimum 10 years, ( as per list under para 3.2(2) (v to x) of the Government Resolution date 31.3.99) on TUFS.


4. Para 3.3 of Part II of the G.R. dated 31.3.99 shall be substituted by the following, namely:-

"3.3 Other investments eligible:

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

(a) Land and factory building including renovation of factory building and electrical installations;
(b) Preliminary and pre-operative expenses;
(c) Margin money required for working capital specifically required for the technology upgradation;
(d) Captive power generation;

provided that if the investment in captive power generation matching with the energy requirement of the technologically upgraded manufacturing capacity together with the other admissible investments included in this subpara, exceeds the stipulated 25% of the total investment in textile / jute textile plant and machinery, such excess investment in captive power generation shall also be admissible for concessional funding.

Further, if a unit has undertaken phase wise technology upgradation and the entire investment in CPP is made in one phase, it will be eligible under TUFS provided the power requirement of technologically upgraded facility effected in all the phases put together is matching with the capacity of CPP and the benefit will be commensurate with date(s) of technology upgradation.

2) Investments in the installation of the following facilities including necessary equipment:
(a) Energy saving devices;
(b) Effluent treatment plant (ETP);
(c) Water treatment plant for captive industrial use;
(d) In-house R.& D. including design studio;
(e) Information technology including Enterprise Resource Planning (ERP);
(f) Total quality management (TQM) including adoption of appropriate ISO/BIS standards.

3) Investment in the acquisition of technical know how including expenses on training and payment of fees to the foreign technicians.

4) Lending in excess of the limits prescribed above in respect of the items included in subpara(1) of this para (para 3.3) shall attract the normal lending rates.


5. Cotton ginning machinery

i) The Govt. has decided that Bailing Press standards should be in conformity with the amended BIS specifications.
ii) A unit with existing 2-stage manual bale pressing machine will not be compelled to replace it while going for other modernisations as per the TUFS. However, a unit replacing the bale pressing machine or installing bale pressing machine for the first time will be required to instal only single stage automatic bale pressing machine
iii) Government had decided that when the cotton ginning & pressing units become eligible for concessional finance under the proposed Technology Mission on Cotton (TMC), such units will no longer be eligible under the TUFS which is in operation w.e.f. 01.04.1999. Since the ginning & pressing units have become eligible for concessional finance under the TMC vide No.1/CM/2000(I) dt.17^th January, 2000, such units are no more eligible for assistance under TUFS with effect from that date. However, applications received prior to the approval of the TMC shall be processed in normal course under TUFS.
iv) Govt.has decided that IDBI will be the nodal agency for pending cases of medium and large scale cotton ginning and pressing units.


6. Cotton Ring Spinning :

In para 4.2 (a) of part II of the Principal Resolution, items (i) and (ii) shall be substituted by the following and para (iii) shall be added as follow:
"(i) In the cotton ring spinning system, only modernisation of existing obsolete spindleage through technology upgradation will be permitted. The replaced old and obsolete spindles should ordinarily be scrapped and made completely unserviceable unless their operations are established to be viable.

[ Note : Ring frames older than 15 years and back up machinery / equipment older than 20 years should invariably be scrapped. ]

(ii) (a) New units or capacity expansion in an existing unit will be permitted only if investment is also made in downstream matching capacity in yarn processing or weaving preparatory and / or weaving / knitting, which must be installed simultaneously; provided that an existing spinning unit expanding its capacity to 12,000 or more spindles but not more than 25,000 spindles shall be required to instal downstream permissible manufacturing capacity matching with 50% of the expanded spinning capacity.
(b)The eligibility of yarn processing as an eligible downstream value addition activity will be to the extent enumerated below:

Yarn singeing together with wet processing of yarn, vis.
bleaching/ mercerising/dyeing (cone/hank dyeing)/yarn printing
                                        OR
Cone winding/doubling/fancy doubling alongwith one or more
of the above mentioned wet processing activities;
                                        OR
Doubling/fancy doubling, singeing and one or more of the above
mentioned wet processing activities
                                        OR
Yarn sizing and warping.

(c) The cotton ring spinning units are permitted to install back-up facilities for de-bottlenecking, viz., cone winding machine, cards, draw frame, speed frame, blow room etc. without increase in the spindleage, provided the unit is at or above the MES level. viable and such investments brings up the unit to the desired benchmark technology level as a whole.

(iii) Installation of compact spinning machine for setting up of new capacity or for modernisation / replacement of existing ring frames is permitted, provided permissible downstream value addition processes equal to 50% of production capacity (calculated at an average of 30's count) of incremental spindleage are also installed."


7. Decentralised Powerloom Sector

The following provisions are made specifically for the decentralised powerloom (SSI) sector :
i) The replacement of an ordinary loom by a new semi automatic loom of minimum width of 165 cms with benchmarked technology features, i.e, weft exhaust stop motion, warp stop motion, warp protector attachment, let off motion (positive/semi-positive), under-picking motion, take-up motion together with anti-crack motion, efficient braking device to stop the loom within a pick, individual motor drive with clutch system and push button with inching arrangement for starting and stopping and inching, preferably, with the following additional features:

(i) lubricating nylon parts/accessories, auxiliary buffer for picking stick;

(ii) all metallic parts of casting and mild steel should conform to relevant BIS standards, and

(iii) in case of velvet looms, the ordinary cam motion should be replaced by modern cam motion which reduces the multiple lever or by positive dobby.

ii) To permit the expansion of weaving capacity by adding new semi automatic looms so as to reach a minimum economic size (MES) of 12 looms.

iii) Expansion beyond 12 looms by semi automatic looms while retaining existing ordinary looms shall not be permitted.

iv) A combination of in situ upgradation and expansion with semi- automatic looms upto a total of 12 looms may be permitted.


8. Minimum loom width in case of airjet loom, waterjet loom and automatic shuttle loom eligible under TUFS is relaxed from 180 cms to 165 cms.


9. Technical Advisory cum Monitoring Commitee (TAMC)

The scope of Technical Advisory Committee (TAC) has been expanded to cover the monitoring function also and accordingly TAC has been redesignated as Technical Advisory cum Monitoring Committee (TAMC). The constitution and functions of TAMC are given at Annex-I.


10. Technical Advisory cum Monitoring Commitee (TAMC)

i) All the 18 SFCs, 17 SIDCs and 11 Twin function IDCs and EXIM Bank have been co-opted by SIDBI and IDBI. Further SIDBI has co-opted 81 commercial banks and 2 co-op. banks and IDBI has co-opted 25 commercial banks and 1 co- operative bank. 4 AIFIs (IFCI, ICICI, IIBI and LIC) have also been co-opted by IDBI. A list of Co-opted PLIs is at Annex-II.

ii) The contingency provision (non-firmed up cost) to the extent of 5% (at actuals) may be covered under TUFS in respect of plant and machinery and other investments eligible under TUFS.

iii) SIDBI has removed the cap of Rs. 100 lakh on project outlay for availing of refinance by PLIs under TUFS. Co-opted PLIs are also allowed to lend under direct finance and to fix their own prudential norms without affecting the technology norms prescribed under TUFS and can interpret the bankable projects in their own way.

iv) For schemes costing Rs.30 crore and below the co-opted banks can directly entertain applications for direct finance.

v) For TUFS, IDBI and SIDBI have stipulated lower minimum promoter's contribution at 20% as against 33.1/3% in other cases. IDBI has agreed to even relax it up to 17.5% in deserving cases.

vi) IDBI will adopt a flexible approach with regard to debt-equity ratio of 1.5:1, with relaxation in deserving cases.

vi) IDBI & SIDBI have relaxed the norms regarding earning of continuous profit during last 3 years for the units with a good track record, viable and positive net worth even if they had incurred losses in one or more of these years.

viii) Maximum repayment period has been extended to ten years (i.e., 2 years moratorium plus 8 years) instead of 8 years (2 years moratorium plus 6 years).

ix) Graded repayment schedules with smaller instalments in the initial years and rising in later years will also be permitted.

x)Nodal Agencies and co-opted PLIs will ensure, while sanctioning TUFS loan, that proper tie up with banks for working capital had been made to ensure speedy sanction and success of the programme.


11. Interest reimbursement :

Government has approved the placement of funds towards reimbursement of 5% interest to the borrower under the scheme on a quarterly basis, in advance but not earlier than 15 days of the due date, to the Nodal Agencies, viz., IDBI SIDBI and IFCI. Government has also approved the covering of exchange rate erosion not exceeding 5% per annum in respect of foreign currency loans. Co-opted PLIs must place their reimbursement claims with the Nodal Agency sufficiently in advance of due date to ensure receipt and credit thereof to the borrowers' account on due date This decision of the Government will ensure the full reimbursement of 5% interest to the borrower without any dilution/erosion due to delay.


12. Grievances Cell

The field level implementation of the scheme is being done by the O/o of the Textile Commissioner, Mumbai. The Textile Commissioner has appointed Smt. Shashi Singh, Director, O/o of the Textile Commissioner, as the grievance officer. Grievances, if any, can be addressed with full details to

Smt. Shashi Singh, Director, O/o of the Textile Commissioner,
New C.G.O. Bldg, 48, New Marine Lines,
Mumbai - 400 020.
Ph.No.022-2031508, Fax No.022-200 4693;
E-mail: driss@ermiul.bom.nic.in

The same would be considered by the office of the Textile Commissioner or if necessary, in the monthly meetings of the Technical Advisory - cum - Monitoring Committee which are held under the chairmanship of Shri B.C.Khatua, Textile Commissioner.

A Grievance Cell has also been opened in the Ministry of Textiles. Cases of grievances, with full details, may be addressed to

Ministry of Textiles (TUFS Cell):
Attention : Shri Y.P.Singh, Director, Ministry of Textiles,
Room No.269-A, Udyog Bhavan,
New Delhi - 110011.
Tel.No.011-301 8142; Fax No.011-379 4284;
e-mail: diryps@ub.delhi.nic.in

13. ANNEXURES

In Annexure 'A' annexed to the Principal Resolution, the following ammendments and additions shall be made, namely :-

1). Amendments

Original Entry No.	Revised Entry No.	After amendment to read as below:
a.7	a.7	Lint cleaner, i.e., post ginning machine ( preferably with wooden spikes) for processing long and extra long staple cotton only.
a.9	a.9	(i)	Bailing press box suitable to prepare banded bales (full pressed) of following nominal dimension (in conformity with the recently amended BIS specification IS:12171:99). Length (in mm) Width (in mm) Height (in mm) 1060 530 or 780 1400 530 or 700 1240 480 480
		(ii)	A unit replacing bale pressing machine or installing bale pressing machine for the first time will be required to install only single-stage double box automatic revolving bale pressing machine. However, a unit with existing 2 stage manual bale pressing machine will not be compelled to replace it while going for other modernisatin as per the TUFS. Depth of Press box (ii) Minimum 8 feet and maximum 12 feet for single stage double box automatic revolving bale pressing machine. (i) Minimum 18 feet and maximum 28 feet for 2- stage manual bale pressing machine. Sr. No. Type of units Criteria to be followed while undertaking modernisation / setting up new unit in respect of depth of press box (A) In existing ginning & pressing units or pressing units; (a) existing press box of less than 18 feet and unit wanting to go for composite status with modernisation Interalia, new press box of minimum 18 feet is a must for 2 stage manual bale pressing machine. (B) (C) Existing ginning units going for composite status with modernisation. New Composite units. Single stage double box automotic revolving bale press machine with press box height ranging from 8 feet to 12 feet.

14. In Annexure 'A' annexed to the Principal Resolution, the following ammendments and additions shall be made, namely :-

1). Amendments

Original Entry No.	Revised Entry No.	After amendment to read as below:
a.2	a.2(i)	Sophisticated blow room machinery for cotton fibre and its blends consisting of pre-cleaners, opening and cleaning machines with chute feeding system, metal detector, microduct remover and dedusting condensors (for open end rotor spinning) with or without foreign fibre detector/remover.
	(ii)	Sophisticated blow room machinery for synthetic/ regenerated fibres and their blends consisting of opening and cleaning machines with chute feeding system, metal detector, with or without foreign fibre detector/remover.
a.3	a.3		Automatic waste extraction system for card, gill box, comber and ring frame with or without waste recovery / recyling machinery.
a.4	a.4(i)	High production card capable of producing sliver above 50 kgs/hr with auto leveller
	(ii)	High production card for lap feed system capable of producing sliver above 50 kg/hr with or without autoleveller.
a.12	a.12		Electronic yarn clearers and splicers.
a.13	a.13		Two-for-one / Three-for-one twisters operating at the speed of minimum 8000 rpm & 5000 rpm, respectively.
a.15	a.15		Industrial humidification system with air washer plant and air filters to maintain RH and temperature with de-humidifiers (chillers)
b.8	b.8		Two-for-one / Three-for-one twisters operating at speeds of minimum 8000 rpm & 5000 rpm, respectively.
h.1	h.1		Modern fibre testing instruments, viz., high/medium/low volume instrument for checking length, strength, micronnaire, maturity, trash, colour etc.
h.3	h.3		Yarn fault classification equipment, viz, classimat, classidata etc.
h.4	h.4		Equipments for testing neps, length, diameter, maturity, trash, viz., AFIS/FILE, advance fibre information system, rapid tester, etc.
h.5+h.6	h.5		Single yarn tenacity, tester, viz. tensorapid,statimat,tensomax, etc.
h.7	h.6		Tenacity / fibre crimp measurement instrument, viz., fevimat, etc.,
I	J		Any other machinery considered appropriate by the Technical Advisory Committee (TAC)

2. Additions

Entry No.	Specification of machinery
b.12	Automatic waste extraction system for card, gill box, comber and ring frame with or without waste recovery/recyling machinery.
c.8	Automatic waste extraction system for card, gill box, comber and ring frame with or without waste recovery/recyling machinery.
h.7	Modern yarn testing equipment, viz., twist tester, hairiness tester, tension tester, co-efficient of friction tester, etc.
h.8	Moisture tester.
h.9	Packing density tester
h.10	High precision weighing balance
i	Modern material handing equipment, viz., fork lifter, bale stackers etc.

15. In Annexure 'D-1' annexed to the Principal Resolution, the following amendments and additions shall be made, namely:

Amendments:

Original Entry No.	Revised Entry No.	After amendment to read as below:
a.11	a.11	Two-for-one twister / Three-for-one twister operating at the speed of minimum 8000 rpm & 5000 rpm, respectively.

2. Additions

Entry No.	Specification of Machinery
a.19	High Speed Multi-cylinder vertical exit warping machine.
b.3B	Replacement of an ordinary loom by a new semi-automatic shuttle loom of minimum width of 165cms with benchmarked technology features, i.e, weft exhaust/stop motion, warp stop motion, warp protector attachment, let off motion (positive/semi-positive), under-picking motion, take-up motion together with anti-crack motion, efficient braking device to stop the loom within a pick, individual motor drive with clutch system and push button with inching arrangement for starting and stopping and inching, preferably, with the following additional features: (i) lubricating nylon parts/accessories, auxiliary buffer for picking stick; (ii) all metallic parts of casting and mild steel should conform to relevant BIS standards, and (iii) in case of velvet looms, the ordinary cam motion should be replaced by modern cam motion which reduces the multiple lever or by positive dobby. Applicable only to the decentralised powerloom sector.

16. In Annexure 'E' annexed to the Principal Resolution, the following amendments and additions shall be made, namely:

Amendments:

Original Entry No.	Revised Entry No.	After amendment to read as below:
a.13	a.13	Smocking machine/Automatic multi needle sirring machine
a.20	a.20	Industrial steam iron with vacuum table and / or buck press.
a.24	a.24	Automatic spreading & cutting table with vacuum and / or air blowing device.
a.33	a.33	Whole garment making machine for knitted garments or power operated garment panel forming knitting machine with linking machine.
a.35	a.35	Automatic thread trimming / sucking machine.
a.43	a.43	CAD/CAM pattern maker with ploter and software including software equipment for embroidery machine.

Additions

Entry No.	Specification of Machinery
a.45	Button wrapping / shanking machine.
a.46	Feed-off-the-arm industrial sewing machine.
a.47	Automatic dart/pleat making machine.
a.48	Automatic label / ply picking machine.
a.49	Pin tucking machine.
a.50	Mechanised fabric pinning table.
a.51	Single needle basting machine.
a.52	Single needle post bed sleeve setting machine.
a.53	Hanging production conveyor system.

17. In Annexure 'F-4' annexed to the Principal Resolution, the following additions shall be made, namely:

Additions

Entry No.	Specification of Machinery
b.I.75	Hank to cone winding machine (High speed machine winding minimum 350 meters / minute with clutch and brake system).

18. In Annexure 'G' annexed to the Principal Resolution, the following additions shall be made, namely:

Additions

Entry No.	Specification of Machinery
c.9	Apron draft spinning machine.