Scheme for Textile Parks failed to realise objectives: Report

The Scheme for Integrated Textile Parks (SITP) failed to achieve its objectives due to factors like small size of the parks and lack of marketing support from the government, a report commissioned by Textiles Ministry has said.
The report has recommended that a new scheme -- Mega Textile Parks -- be launched with parks having minimum land size of 1,000 acres, and infrastructure support in the form of readymade factory sheds, warehouse, incubation centres and testing labs, with express connectivity to seaports and airports.
The implementing agencies for the new scheme should be entrepreneurs led SPV (special purpose vehicle), industry associations or state government either through their institutions or in PPP mode, says the report on review of the SITP scheme.

"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," said the report by Wazir Advisors, submitted to the Textiles Ministry.
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 scheme has so far achieved limited clusterization, the report found.

"Due to lower occupancy rates, parks have not yet attained their planned investment levels. The current investment in 30 functional parks is around Rs 7,628 crore against their planned investment of Rs 16,628 crore.
"As most of the parks are of the size from 25 to 75 acres hence the Scheme has had limited impact in bringing scale to the textile industry," according to the report.
It suggested that 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".

The cost of manufacturing inside the park was found to be only marginally higher than an industrial zone in vicinity due to higher cost of land and maintenance inside the park.
The current employment level in 30 functional parks is around 68,000 people, 57 per cent of their planned employment.
There are 74 parks sanctioned till date. Out of these 30 parks are functional, while eight have applied for cancellation and others are at various stages of implementation.
The functional parks are involved in production of spun yarn, fabric weaving and knitting, fabric processing, garmenting, made-up manufacturing, and technical textiles.