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Home / IAS Preparation / Government Schemes of India / Amended Technology Upgradation Fund Scheme

Amended Technology Upgradation Fund Scheme (ATUFS) - History, Objectives, Features, Benefits & More

Last Updated on Sep 11, 2023
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The Amended Technology Upgradation Fund Scheme (ATUFS) is a government program. It provides financial help to textile mills to upgrade their technology. The scheme was amended in 2022 to make it more accessible and user-friendly. The amended scheme provides a higher subsidy for the installation of new machinery. It also covers the cost of training for workers. 

In this article, we will learn about the ATUFS scheme, its objectives, features, significance, and other important facts and figures for the UPSC IAS Exam preparation. 

This is an important topic under the ‘Technology and Economic Development section of the General Studies Paper-3 syllabus. Join IAS coaching today and realize your dream.

Latest News about ATUFS

The Ministry of Textiles wants to replace the Amended Technology Upgradation Fund Scheme scheme with a scheme system like the Production Linked Incentive (PLI) scheme and has invited suggestions.

Textile units in Surat have sought the implementation of the Textile Technological Development Scheme (TTDS) immediately or the extension of the ATUFS scheme instead of a PLI-like scheme.

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What is Amended Technology Upgradation Fund Scheme (ATUFS)?

The Amended Technology Upgradation Fund Scheme (ATUFS) is a government initiative in India. It is aimed at providing financial support to promote technological advancement in the textile sector. Under this, eligible textile units can access funds to upgrade their manufacturing processes.

History of ATUFS

The ATUFS was launched in 2005 by the Ministry of Textiles, Government of India. The scheme was designed to provide financial help to textile mills. It helps them upgrade their technology and improve their productivity. The initial scheme provided a subsidy of up to 25% for the installation of new equipment.

The ATUFS was amended in 2022 to make it more accessible and user-friendly. The amended scheme provides a subsidy of up to 50% for the installation of new machinery. It also covers the cost of training for workers. The ATUFS is now open to all textile mills, regardless of their size.

The ATUFS has been a successful scheme. It has helped to improve the technological capabilities of the Indian textile industry. The scheme has also helped to create jobs and boost exports.

Aims and Objectives of ATUFS 

  • To promote ease of doing business in the textile sector.
  • To promote textile exports and make India a global player in the international textile market.
  • To generate employment in the textile sector.
  • To promote converting outdated looms technology with better quality and latest machinery to make superior products.
  • To promote technical textiles.

Technical Textile: Technical textile is meant by the textile material and products primarily used for their technical performance and functional properties instead of their aesthetic or decorative properties. Technical textiles are primarily made of synthetic fibers like nylon, rayon, etc.

Some examples of Technical textiles are- the Textiles used for Automotive applications. Agro-Textiles, Medical Textiles, Protective clothing Geotextiles, etc.

Salient Features of ATUFS

The following are the salient features of the ATUFS scheme:

  • Capital Investment Subsidy: The scheme provides a subsidy of 15% of the capital investment for the textile sector and 10% for other sectors for the upgradation of technology and machinery.
  • Interest Subsidy: The scheme provides an interest subsidy of 5% for seven years on loans taken for technology upgradation.
  • Focus on Sustainability: The scheme focuses on sustainable and environmentally friendly technology and encourages using renewable energy sources in textile units.
  • Inclusion of Other Sectors: The scheme is not limited to the textile industry and has been extended to other sectors such as jute, handloom, silk, and wool.
  • Modernization of Existing Units: The scheme also includes a provision for the modernization of existing units.
  • Special Focus on Small and Medium-sized Enterprises: The scheme gives special emphasis to small and medium-sized enterprises by providing a higher subsidy rate of 25% for capital investment in certain specified segments.
  • Industry Participation: The scheme encourages industry participation by requiring a minimum contribution from the beneficiary units.

Read an article on The Make in India Initiative here!

Benefits of Amended Technology Upgradation Fund Scheme

Here are the benefits of the Amended Technology Upgradation Fund Scheme (ATUFS):

  • The ATUFS provides a subsidy of up to 50% for the installation of new machinery and equipment. This can help reduce the cost of upgrading a textile mill's technology.
  • The ATUFS also covers the cost of training for workers. This is important because new technology often requires new skills. The ATUFS helps to ensure that workers have the skills they need to operate new machinery.
  • The application process for the ATUFS has been simplified. This has made it easier for textile mills to apply for funding.
  • The ATUFS is open to all textile mills, regardless of their size. This means that even small and medium-sized enterprises can benefit from the scheme.

Eligibility of ATUFS

The following entities are eligible for this scheme:

  • Silk Sector
  • Handloom sector
  • Technical textiles
  • Jute sector
  • Madeup/garment manufacturing
  • Processing fabrics, fibers, garments, madeup, and yarns
  • Weaving preparatory, weaving, and knitting

Read an article on Priority Sector Lending here!

Significance of Amended Technology Upgradation Funds Scheme 
  • Employment generation– ATUFS has a primary objective of Employment generation so that the benefit of the expansion of the textile sector reaches the maximum number of people.
  • The scheme aims to promote textile Exports and indirectly promote the Make in India campaign.
  • The Amended Technology Upgradation Fund Scheme brings new technology and machinery to the textile sector, which will result in the following:
    • Superior quality products.
    • Increase in investment in the textile sector.
    • Fast-paced growth in the textile sector.

Read this article to know about the Kisan Credit Card scheme here!

What is i-TUFS?

i-TUFS is an application software that can be used by any designated Inspection Officer of the Textile Commission of India to inspect the physical progress of an installation and financial assistance under the Amended Technology Upgradation Fund Scheme.

It aims to capture good quality photographs with timestamps, geo-coordinates of the plant's location, and installed machinery.

Read an article on Global Housing Technology Challenge here!

Current Status of ATUFS
  • The Amended Technology Upgradation Fund Scheme has so far supported the textile industry by providing credit-linked subsidies for the modernization of the textile sector in India.
  • The textile ministry has drafted a new TUFS to replace the ATUFS.
  • The new scheme will also look to incentivize the machinery manufacturers.
  • In the new scheme, the spinning sector will also be included.

Amended Technology Upgradation Funds Scheme: Key Facts and Figures for UPSC

Fact and Figsures

Name of Scheme

Amended Technology Upgradation Fund Scheme (ATUFS)

Launch Year

2016

Ministry

Ministry of Textiles

Predecessor Scheme

TUFS (1999)

Objective

To facilitate employment, investment, quality, productivity, as well as import and export substitution in the textile sector of India

Know more about the 5 Stages of the Technology Adoption Curve!

Way Forward

The ATUFS has helped the textile sector make great strides towards modernization by encouraging new technology and is a great success story thus far. But there is a need to address the following issues in the future with another Technology Upgradation Fund Scheme:

  • The scheme can be expanded to other sectors of the textile sector to unleash its full potential and maximize its benefits.
  • There can be a provision for special incentives for purchasing indigenous machinery, which will help encourage the Make-in-India initiative in the industrial manufacturing sector.
  • The subsidy can also be adjusted to an optimum ratio of the total investment to add more beneficiaries.
  • Better use of the Amended Technology Upgradation Fund Scheme platform to ensure transparent and timely implementation.

Read an article on Swacch Bharat Abhiyaan here!

We hope all your doubts regarding the ATUFS are cleared in this article. Testbook also provides notes, live classes, and test series for many more competitive exams, including- BANK, RAILWAYS, SSC, NDA, CDS, and many more. To read more such articles and sharpen your UPSC IAS Exam preparations, download the Testbook App now!

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Technology Upgradation Funds Scheme FAQs

Amended Technology Upgradation Fund Scheme (ATUFS) is a credit-linked subsidy scheme for the textile sector which aims at technological upgradation of the textile sector by means of subsidies to achieve the objectives of encouraging ease of doing business, employment generation, and export promotion.

The Capital Investment Subsidy (CIS) is a subsidy scheme providing credit-linked capital investment subsidies for the development of a particular sector at a rate decided by the government.

Any entity registered under the Companies Act 1956/2013/2016 or which meets the criteria under the ATUFS eligibility guidelines can apply for the benefits to buy new benchmarked machinery for the textile sector.

The Amended Technology Upgradation Fund Scheme (ATUFS) was launched in 2016.

The Textile Upgradation Fund is a fund used to encourage the practice of research, innovation, and modernization in the textile sector.
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