According
to sources, these incentives are under Technology Up-gradation Support
Order 2010, in pursuance of entry 7 of item 29A of Schedule II to the
Rules of the Business 1973, to support the investments aimed at
upgradation of textile machinery and technology.”According to a
notification, No 3(1 8)TID/10-P-I, issued by the Ministry of Textile
Industries, this order will cover whole of Pakistan for five years,
from September 1, 2009 to June 30, 2014. Disbursements under
‘Technology Up-gradation Support Order’ will continue for the duration
of loans obtained till June 30, 2014 and this facility will be
administered by commercial banks and DFIs..”Under the Support
program, for projects exceeding investment of Rs 10 million in
machinery or technology, the Federal Government will pick up 50 percent
of mark-up, subject to maximum 5 percentage points pa, whichever is
less. In addition, for projects with investment in machinery and
technology not exceeding Rs 10 million, the Federal Government may
provide grant up to 20 percent of capital cost, for new Plant and
Machinery only as ‘Investment Support’..”This support will be
available to SMEs as defined under the SBP Prudential Regulations for
SMEs. According to the notification, the repayment period will not
exceed ten years, including grace period, as may be allowed by the
State Bank of Pakistan, and the investment support will be provided to
existing and new textiles units registered with Ministry of Textile
Industry..”However, mark-up support shall not be available to
borrowers having non-performing loans, classified under SBP Prudential
Regulations. Further, it will also make the borrowers ineligible for
availing the support during remaining period of the loan if their loans
are classified after introduction of this support..”In addition,
mark-up support will not be available for loan disbursed before
September 1, 2009. The investment support shall cover only the
technology and machinery identified under this Order by a Financial and
Technical Committee to be constituted and notified by the Ministry of
Textile Industry. The Committee shall also permit the percentage of
interest reimbursement/capital grant by the Government of Pakistan,
depending on the technology and value-addition..”As per
notification, Industrial Stitching Machines, Garment Dyeing Machines,
Garment Special Effects Machines, Processing Plants, Shuttleless Looms,
Knitting Machines, Yarn Dyeing, Yarn Singeing, Open End Machines, Ring
machines for finer Counts, Ginning Machines, Power Generation Equipment
for Textiles and Clothing Units, Effluent Treatment Plants, Energy
saving equipment, Textiles testing equipment, CAD/CAM/CIM system,
Machinery for Technical Textiles/Non Woven, Quilting machinery and
equipment, Fibre/Filament Manufacturing Machinery 20 and Machinery
attachments for value-addition including Coarse filament yarn, Compact
Spinning, Spandex yarn and Siub yarn would be eligible for support
project..”However, the Government may periodically review and
revise the list in consultation with the industry. The facilities would
not be used, or availed, in duplication ie plant, machinery and
equipment financed under SBP’s LTFF Scheme and or any other support or
concession of Government of Pakistan shall not be eligible for the
support under this Order..”The registered units would furnish data
and any information related to the unit’s operations, domestic sales,
accounts and exports as and when required by the Ministry of Textile
Industry. It would be the responsibility of commercial banks /DFIs to
assess the viability of the projects and financing requirements. The
credit decision of the commercial bank/DFls would be final..”After
disbursement of loan, either in part or full, the banks or DFIs may
approach the Offices of State Bank of Pakistan, BSC (Bank) concerned
for obtaining mark-up support as mentioned in clause 4(1). The credit
risk under the scheme shall not be borne by the government, and it
would be the responsibility of commercial banks/DFIs to forecast the
interest repayment on six-monthly basis and provide such information to
SBP and Ministry of Textile Industry..”Mark-up support will be
paid by commercial banks on six-month basis in March and September each
year subject to release of funds by the Federal Government for relevant
fiscal year. The State Bank will reimburse the amount of mark-up rate
support to commercial banks by debit to the appropriate Federal
Government account to be intimated by the Finance Division..”The
ministry of textile industry has made it clear that the federal
government reserves the right to make any changes, additions, deletions
and modifications in the scheme under this Order which it may consider
necessary. Any unit which in contravention of the provisions of this
Order, through acts of omission or commission, files fraudulent or
false claims shall be liable to penalties, as may be prescribed by the
SBP or Ministry of Textile Industry..”The appellate authority,
where penalties have been imposed by the SBP, will be the Secretary,
Ministry of Textile Industry, while the details and procedure for the
Technology Up-gradation Support would be prepared and announced by the
State Bank..
Date:4/15/2010
Source:The International News