Rs 300 cr textile park in Madhya Pradesh soon

The Centre for Entrepreneurship Development Madhya Pradesh (Cedmap), an autonomous body under the state department of industries, will soon enter into a deal with local powerloom entrepreneurs of Burhanpur (400 km from Bhopal) to set up a Rs 300-crore textile park in the town. The park is likely to attract 50 units and will create around 20,000 jobs.

As many as 151 entrepreneurs of Burhanpur have formed an independent body named Burhanpur Fairdeal Cooperative Society for setting up the park on an area of 54 acres in Nimbola village in the vicinity of the town.

"We will finalise the deal during the first week of September in our annual general meet," Om Prakash Upadhyay, president of the Society, told Business Standard. He also said all shareholders had given their consent to participate in the park for creating necessary infrastructure at an investment of Rs 300 crore.

SITP or Scheme for Integrated Textile Park is a Central government scheme to promote and develop powerloom sector in the country. Despite powerloom been awarded 'industry' status in Madhya Pradesh two years ago, the state government has failed to cash in on the scheme or utilise Textile Upgradation Fund (TUF) for the ailing powerloom sector.

"We will provide project management consultancy on turn-key basis so that the entrepreneurs can get maximum benefit of the scheme and facilities available in the state," Jitendra Tiwari, executive director Cedmap told BS. Although Central government has appointed IL&FS for all SITPs in India, the detailed project report (DPR) and other feasibility studies etc., prepared by Cedmap will be vetted by IL&FS. "We have an in-principle consent with them (IL&FS) to prepare report, provide technical and financial consultancy to the society," Tiwari added.

Under the scheme, the Centre offers 40 per cent subsidy as a stake-holder, entrepreneurs hold 51 per cent equity while the state government holds 9 per cent equity.

"In case the state government does not picks up 9 per cent, we will rope in bankers as equity partners to get bridge loan etc. The society may also increase its equity holding up to 60 per cent," Tiwari further said.

Burhanpur is famous for its powerlooms since 1940 but after the removal of quota regime it is suffering in the absence of modernisation and competition from textile towns like Surat and Bhiwadi.