IN WHAT may come as a further setback for the textile industry, hit hard by the appreciating rupee, the government may soon scrap two schemes aimed at supporting local entrepreneurs — the apparel parks for export scheme (APES) and the textile centre infrastructure development scheme (TCIDS). The schemes were introduced in 2002. In fact, the textile industry is apprehensive that the government may also decide to stop financing the projects already sanctioned under the schemes worth about Rs 465 crore.
A government study initiated to examine the implementation of these schemes concluded that the programmes have not been successful in evoking interest among entrepreneurs. “There was a design defect in these schemes as these were implemented on the initiative of state governments without the assurance of interest among entrepreneurs,” an official said.
The government is now planning to take a detailed assessment of the programme to decide about its sustainability in the 11th Five-Year Plan. The Planning Commission, too, has suggested that the government should assist only such programmes where there is an active interest among entrepreneurs.
The government has so far sanctioned 18 projects under TCIDS and 12 under APES involving a total monitory assistance of Rs 271.06 crore and Rs 191.70 crore, respectively. An amount of Rs 172.50 crore has been spent on these schemes during the 10 Plan.
However, it is not clear whether the government would continue to provide financial support to the projects which have already been sanctioned or they would be forced to wind up. “If the government decides on scrapping the scheme, we would pitch in for making an arrangement so that the sanctioned projects do not get affected,” said a textile ministry official.
Under the APES scheme, the Central government gives a grant of up to 75% or Rs 10 crore of capital expenditure incurred by the state government on the infrastructural facilities of the apparel park, while the remaining 25% is borne by the agency. Despite the fact that the scheme is centrally sponsored, the Centre has not set any standard and, as a result, state governments follow different approaches for implementating the scheme.
Under the TCIDS scheme, the Centre gives an assistance of up to 50% (maximum Rs 20 crore) of the critical components of the project. The projects is aimed at improving manufacturing from textile clusters.