Govt Reviews Textile Park Plan After Norm Violation Report Surfaces

Trade & Policy

Govt Reviews Textile Park Plan After Norm Violation Report Surfaces

The government is reviewing the Scheme for Integrated Textile Parks (SITP) after a report found that the scheme failed to achieve its objectives and special purpose vehicles of the parks violated norms. "We are reviewing the Scheme for Integrated Textiles Parks as many SPVs were found violating its norms as non-textiles units were operating from inside the parks," a senior Textiles Ministry official said.

"The report commissioned by us has also revealed many loopholes in the scheme which need to be rectified," the official said. The report by Wazir Advisors to the Ministry has cited various reasons, including 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 SEZs, for the scheme failing to attain its objectives.

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, said the report on review of the SITP scheme.

Textiles Minister Smriti Irani last month had informed Parliament that the ministry was examining complaints against certain SPVs of textile parks sanctioned under the SITP for violation of guidelines.

She had said that show cause notices to at least four SPVs, namely the Vraj Integrated Textile Park; GILT Textile Park; Surat Super Yarn; and EIGMEF Apparel Park, had been issued for violation of norms.

"The Government has sought response of Infrastructure Leasing and Financial Services Ltd. (IL&FS) which was the Project Management Consultant (PMC) for Vraj Integrated Textile Park regarding violation of guidelines/criteria of the Scheme for integrated Textile Parks (SITP) by the Special Purposes Vehicle (SPV) of the said park.

"Based on the response of IL&FS, the SPV and PMC have been directed to get those non-textile units which were not part of the approved project of Vraj Integrated Textile Park relocated outside the textile park area sanctioned under the SITP," Irani had said in a reply to the Lok Sabha.

The Vraj integrated textile park is owned by the Chiripal Group and is based in Gujarat. The Textiles Ministry has also cancelled several projects after the SPVs were found flouting the SITP's guidelines. These include Bharat Fabtex & Corporate Park Pvt Ltd; Vaigai HiTech weaving Park; Shri Dhairyashil Mane Textile Park Co-op Society Limited; Hyderabad Hi-tech Weaving Park; Edison Integrated Textiles Park; Shri Lakshmi Cotsyn Ltd; Wada Textile Park; Kapila Textile Park; Rajasthan Texmart Textile park; Soham Textile Park; Shri Laxminarayan Textile Park; and SLS Textile Park, Tamil Nadu.