Ministry gets go ahead to set up 25 textile parks

The success story of the textile park at Tirupur might be repeated all over the country with the Union Cabinet approving the textile ministry's proposal to set up 25 textile parks in two years.

"The Cabinet has already approved the proposal for setting up 25 textile parks in the country. IL&FS would be the nodal agency, which would facilitate the whole course of action. The notification to IL&FS would be issued within a couple of days," said R Poornalingam, Union textile secretary.

The total investment for the project would be to the tune of Rs 7,500 crore.

"Each park will require an investment of around Rs 300 crore. The government will, however, provide a 40 per cent subsidy in building infrastructure upto a maximum limit of Rs 40 crore. Each park will be a special purpose vehicle (SPV) and will be managed by entrepreneurs," Poornalingam said at an interactive session on 'Post Multi Fibre Agreement-Focus: India' organised by the Bengal National Chamber of Commerce and Industry (BNCCI).

These textile parks would come up within next two years as the deadline is 2008, he said.

"Indian textile industry has to build up production capacity in leaps and bounds before China can get into the unrestricted global textile market. Therefore, the capacity expansion should be done within next two years," he said.

Poornalingam also said IL&FS has informed the ministry that at least 10 such textile parks would come up within the next twelve months.

The first textile park at Tirupur, spread over 120 acre, was set up at a cost of Rs 300 crore and already 60 textile units have been made operational. These units will have an export potential of Rs 3,000-4,000 crore within next two years, he added.

Moreover, the ministry is also expecting the Cabinet's approval for the Rs 345 crore fund for jute technology mission.

"The proposal for Rs 345 crore would be submitted for the Cabinet's clearance within a fortnight," he added.

All these initiative would be an important step towards achieving the $50 billion export figure by 2010, he added.

He further noted that a study done by CRISIL has envisaged that this would require an investment of Rs 1,40,000 crore in the total textile sector out of which only Rs 25,000 crore investment has been done.

India would surely achieve 25 per cent export growth in the current financial year against Rs 13 crore export during 2004-05, he assured. The ministry has already enhanced the budget allocation under technology upgradation fund (TUF) to Rs 435 crore for the current year as compared to Rs 220 crore in 2004-05, Poornalingam said.