A new scheme—Mega Textile Parks—with parks having minimum land size of 1,000 acres has been recommended by a report commissioned by the textiles ministry. Such parks should also have infrastructure support in the form of readymade factory sheds, warehouse, incubation centres and testing labs, with express connectivity to seaports and airports.
The new scheme should be implemented by entrepreneurs led by special purpose vehicle (SPV), industry associations or state government either through their institutions or in public-private partnership mode, suggests the report on review of the Scheme for Integrated Textile Parks (SITP).
The mega textile parks should be established in Industrial Corridors and/or areas with proximity to seaports, and the financial support must be linked with “extent of area developed, without any ceiling on financial assistance”, says the report prepared by Wazir Advisors for the textiles ministry.
In its review of SITP, the report says, “The intended objective of SITP to foster the development of supply chain linkages and reduction in the cost of production by leveraging backward and forward integration in the value chain is yet to be realised as most of the operational parks are partially functional.”
“The other reasons are lack of coordination among the units in the park, inability to attract the right investors, failure to achieve economies of scale and lack of collective approach in raw material sourcing and marketing,” it adds.
The report cited high rentals in some parks, changes in other government schemes or regulations, lack of marketing efforts, no special benefits available for investors in parks, poor accessibility and challenges for units in SEZ Parks as some of the factors responsible for the scheme failing to attain its objectives.
The report found that parks have not yet attained their planned investment levels due to lower occupancy rates. “The current investment in 30 functional parks is around Rs 7,628 crore against their planned investment of Rs 16,628 crore.”
Similarly, the textile parks had limited impact in bringing scale to the textile industry as most of the parks are of the size from 25 to 75 acres.
Summarising the status of textile parks across the country, the report says 74 parks have been sanctioned till date, of which 30 are functional, while eight have applied for cancellation and others are at various stages of implementation.
The 30 parks that are currently operational employ around 68,000 people, which is only 57 per cent of their planned employment. (RKS)
Source:Fibre2Fashion News Desk – India