Textile parks scheme hit by slow execution


December 7, 2008

By Sapna Dogra Singh

Business Standard

New Delhi December 07, 2008

Lack of an apex body, along with the absence of time-bound deadlines, are being cited as reasons behind the poor implementation of the scheme for integrated textile parks (SITPs), which is the textile ministry’s flagship scheme, according to industry experts.

The objective of this scheme launched in 2005 was to create jobs and world-class infrastructure. However, so far, out of the 40 sanctioned parks, just four have become operational.

"It is a grand plan but actual execution is very slow," said Devangshu Dutta, chief executive officer of Third Eyesight, a consultancy firm which has worked with some of India’s leading textile companies. There are multiple stakeholders, including the central government, state governments, district authorities and several companies. "Bringing them together is a difficult job," said Dutta.

Under the SITPs, the government provides up to 40 per cent of the cost of setting up a textile park with a ceiling of Rs 40 crore. Till now the ministry has contributed Rs 450 crore. The industry has pitched in with nearly double this amount. The combined investment is expected to touch Rs 2,000 crore by 2009-end.

The Parliamentary Standing Committee on labour has also made similar observations in September. While ruing the slow pace in the progress of SITPs, it has recommended that a time-bound action plan should be drawn up to ensure that the sanctioned textile parks become fully operational as any delay in this regard may not only involve the cost overrun but could also result in weaning the entrepreneurs away from scheme.

According to a senior textile ministry official, the reasons for delays are local issues which involve land deals, pollution and environment clearances in case of processing parks and sometimes there’s conflict amongst the entrepreneurs, which could result in the cancellation of the park.

The four parks, which have become operational are — Palladam HiTech Weaving Park at Palladam in Tamil Nadu, Brandix India Apparel City at Vishakhapatnam in Andhra Pradesh, Pochampally Handloom Park at Pochampally in Andhra Pradesh and Gujarat Eco Textile Park, Surat, Gujarat.

Most of the parks are progressing smoothly and by year end about five to seven more parks would become operational, informed the ministry official and added that the progress has also slowed down now because of the financial constraints that people are facing in view of the current economic slowdown, added the official.

Incidentally, an inter-ministerial Project Approval Committee (PAC) for SITPs is meeting in the third week of December to review the progress of the textile parks and also to take a call on cancellation of some of the parks. At least three projects are likely to be cancelled and be given to other interested parties, said the official.
The committee meets on a quarterly basis.