At least three 'completed' textile parks closed, finds CAG report

Auditor says large number of cancellations defeated the purpose of the scheme

At least three textile parks in Surat (Gujarat), Pochampally (Telangana), and Latur (Maharashtra) that were classified as successfully completed and shown as functional in the textiles ministry’s records were found to have been shut down during a compliance audit of the integrated textile parks conducted by the Comptroller and Auditor General (CAG).

In the audit report, which was tabled in the Parliament last week, the CAG said the ministry considered the parks “completed” solely on the basis of the recommendations of the project management consultant (PMC) without physical verification by its own officials.

The CAG recommended that the ministry take punitive action against the PMCs and special purpose vehicles for providing false information.

Out of the 10 completed parks sampled, the audit found that the ministry treated five parks as “completed” without ensuring the creation of common infrastructure and facilities that were initially planned in their detailed project reports.

The ministry released grants (ranging between 60 per cent and 79 per cent of the total grant) for three sampled parks based on recommendations of the PMCs without ensuring availability of statutory clearances before commencement of the parks.

“The sanction of grants amounting to Rs 79.61 crore to the three sampled parks was not fruitful so far as the parks were still incomplete due to non-availability of statutory clearances,” it said.

The CAG recommended that the ministry consider making the availability of land and statutory clearances required for setting up of textile parks a pre-condition for sanction or release of grants.

The Centre introduced the Scheme for Integrated Textile Parks (SITP) in 2005 with the objective of establishing world-class infrastructure to set up textile units, which would, in turn, generate employment opportunities and increase investments.

The ministry sanctioned 98 parks under the scheme till June 2016 after which no additional parks were sanctioned. The Centre has released grants worth Rs 1,592.52 crore to these parks. As per the data submitted by the ministry to the CAG, out of the 98 sanctioned parks, 26 were marked as completed, while 30 were considered ongoing and 42 cancelled. 

An amount of Rs 77.34 crore remained unrecovered from 10 cancelled parks apart from penal interest of Rs 117.72 crore.

“The cancellation of a large number of parks and inordinate delays in completion of the parks defeated the purpose of the scheme to that extent,” the CAG observed. 

The CAG audit found that there was a huge shortfall in achieving targets by the textile parks sanctioned under the scheme. Only 30 per cent of the employment and 50 per cent of investment targets were achieved 16 years after the inception of the scheme.

The auditor also highlighted the ministry’s failure in continuing the monitoring of the Doddaballapur Integrated Textile Park in Karnataka, which was found to be running non-textile activities in the park, “thereby defeating the very objective of the scheme”.