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Earlier through a background note on textile sector circulated for the Economic Editors Conference (7-8 November 2006) by the Ministry of Textiles it was stated that there has been a resurgence in the Indian Textile Industry in the post quota period. India is emerging as one of the major outsourcing hubs as it has comparative advantage over its competitors on availability of relatively inexpensive and skilled workforce, design expertise, a large production base of basic raw materials, yarn and fabric and availability of wide range of textiles. The environment prevailing was conducive for accelerated growth and investment in the textile sector. It was further noted that there has been an expansion in the Indian Textile Industry in the post quota period with the industry size expanding from US $ 37 billion in 2004-05 to US$ 47 billion in 2005-06. The domestic market during this period increased from US$ 23 billion to US$30 billion whereas the exports went up from around US$14 billion to US $ 17 billion. To help the industry to increase the competitiveness the government took certain major initiatives like fiscal reforms, technology mission on cotton (TMC), Technology Upgradation Fund Scheme (TUFS), Scheme for Integrated Textile Park (SITP) and other infrastructural projects like Indian Exposition Mart, Greater Noida, Apparel International Mart at Gurgaon, Indian Textile Plaza, Ahmedabad, Human Resources Development Initiative and also improvement of quality inputs through National Institute of Fashion Technology, Sardar Vallabhai Patel Institute of Textile Management and Apparel Training and Design Centres.
The concept of Scheme of Integrated Textile Park (SITP) was invented by merging two major schemes which hitherto remained more or less a non-starter. The scheme accepted the importance of world class infrastructure facilities to make the Indian Textile Industry globally competitive. The two major schemes merged for this purpose were - "Apparel Parks for Exports Scheme" and "Textile Centres Infrastructure Development Scheme (TCIDS)". Both these schemes were launched in the year 2002 and considering the rather lukewarm response to both they now have been subsumed into a new scheme namely "Scheme for Integrated Textile Park (SITP)". The scheme announced in the year 2005 was approved by the Cabinet Committee on Economic Affairs on July 25, 2005 initially for setting up 25 parks for exports across the country at an estimated cost of Rs. 625 crore spread over the years 2005 and 06. It was expected that the scheme will create 25 textile parks with an international infrastructure to house approx imately 1250 textile units leading to a substantial increase in textile exports. It was expected that the scheme will catalyze a private investment of Rs.18,500 crore and will help create five lakh jobs. As per the initial design, each park was supposed to provide modern infrastructure for locating at least 50 textile units at pre-identified locations with a potential. The projects were supposed to be need based and the parks were expected to cover the weaving, knitting, processing and garmenting sectors.
The SITP scheme thus would have come to an end automatically as it was initially declared for a period of two years. However considering the excellent response with 30 parks sanctioned and 26 out of them approved under the scheme the Textile Industry's appetite for modern and well designed infrastructure has clearly surfaced. The Finance Minister presenting the current year's budget therefore only endorsed the twin factors viz. the appetite of the textile industry for a well designed packaged infrastructure and the response based need to have some more time for additionally creating the integrated textile parks at more locations. The enhanced outlay of Rs.425 crore for the year 2007-08 in comparison with the provision of Rs.189 crore for 2006-07 makes a sense with this background.
Coming back to the textile industry and how it is performing the background note circulated to the Economic Editors Conference makes an interesting reading talking about Industry Vision 2010. Putting a study by CRISIL it is stated that the Indian textiles and apparel industry is poised to attain a potential size of uS$ 85 billion by 2010, of which, the domestic market potential would be US$ 45 billion and export potential would be US$ 40 billion. Nearly 60 per cent of exports would comprise garments. The momentous growth in the textile economy from US$ 37 billion to US$ 85 billion would generate over 12 million new jobs mainly for semi-skilled and unskilled labour. Direct employment opportunities of 5 million jobs are envisaged, of which 4 million would be in the apparel segment. Another 7 million jobs are expected to be generated in the allied sectors, primarily in cotton and jute farming and related activities.
The optimism expressed above is supported by the fact that the Indian Textile Industry is in much stronger position now than it was in the past. The industry which has been experiencing a rate of growth of 3-4 per cent during the last six decades and was labelled more or less as a stagnating sector has all of a sudden revived and jumped to a growth of 9-10 per cent. From a sense of despair and dejection all of a sudden one finds that there is a sense of renewed enthusiasm and optimism in the industry with the sector now dawning the garb of a "sunrise sector"!
It is in this context the principle on which the SITP scheme is announced merits the acceptance. However the real test of a pudding is in its eating. The initial response to the scheme which offers a substantial help by way of subsidy has been excellent. It was stated while announcing the scheme that - "The Scheme is co-terminus with the Tenth Plan period. Its continuation into Eleventh Plan would be dependent upon the success in completion of 25 projects in next two years". Though the Integrated Textile Parks projects sanctioned so far have taken longer than what was expected to reach the completion stage. Our interaction indicates that the formalities are taking longer than what they should plus there are irritants like land acquisition formalities and converting the same into the Non Agriculture use. The delays in implementation how long and to what extent would effect the overall projections regarding the contribution and viability of these parks and what would be its impact on the o verall growth of textile exports remains to be seen. For the time-being the Finance Minister's declaration extending this scheme into the first year of the Eleventh Plan is encouraging and endorses the faith of the government in the efficacy of the scheme. Let us hope the implementing private sector agencies would live up to the expectations. The time only will tell the difference !
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