CAG Points Out Shortcomings In Development Of Textile And Apparel Parks In Telangana

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CAG Points Out Shortcomings In Development Of Textile And Apparel Parks In Telangana

The Comptroller and Auditor General (CAG) of India has pointed out shortcomings related to the development of textile and apparel parks, claiming that an audit of four out of the eight parks proposed in Telangana state, showed significant time overruns in their completion ranging from seven months to 151 months.

According to the CAG report which was tabled in the Telangana legislative assembly recently, expenditure incurred by the Telangana state government (Rs 6.04 crore) and the central government (Rs 14.34 crore) did not yield expected results in respect of a textile park at Sircilla and the Whitegold Integrated Spintex Park Private Limited (WISPL). According to the CAG report, there were no export sales from a textile park in Sircilla and the WISPL against the targeted Rs 10 crore and Rs 650 crore a year respectively.

While the textile park of Pochampally reported export sales of Rs 1.53 crore against targeted Rs 17.5 crore a year, there was shortfall in establishment of units in the parks ranging from zero to 100% and 81% to 100% in respect to employment generation, the CAG report stated. The CAG report observed that in the apparel export park of Gundlapochampally, 53% of the total units belonged to non-textile or apparel manufacturers, and the park had not achieved its intended purpose of being an apparel hub.

Incidentally, the CAG report comes shortly after an earlier report commissioned by the Union Textiles Ministry also stated that 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. The report submitted to the Union Textile Ministry has recommended that a new mega textile park scheme should 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 report prepared by Wazir Advisors and submitted to the Union Textiles Ministry had 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.