The Hindu Business Line : Promoters of hi-tech weaving parks seek upfront subsidy

MEMBERS of the powerloom weaving industry investing in three hi-tech weaving parks in Tamil Nadu (approved by the Centre and the State Government) have asked the Ministry of Textiles for an upfront release of the subsidy component envisaged in the park scheme.

The members of special purpose vehicle companies that promote weaving parks in Palladam (Coimbatore), Komarapalayam (Namakkal) and Andipatti (Theni) have stated that the parks require seed capital support. If the Government does not allow any seed capital sanction, it can still help the promoters by releasing the capital subsidies envisaged under the hi-tech weaving park project components at least on a stage-by-stage basis

" SIDBI and State Bank of India, which have offered to fund the individual units participating in the projects, are expressing difficulty in offering the bridge loan. Hence our plea for an upfront release of the capital subsidy," said Mr Senthil Kumar, Chairman and Managing Director of the Palladam Hi-Tech Weaving Park, which has completed the allotment of industrial plots for its member-promoters.

The officials of the three park projects made a plea in this regard to Dr H. S. Das, Additional Textile Commissioner in Mumbai. The organisers of the parks also insisted that the Ministry of Textiles should extend a `comfort letter' to financial institutions/banks as a commitment that the Central subsidy for these weaving parks would be routed through the lending institutions.

Dr Das later told this correspondent that he would recommend to his Ministry the views expressed by the promoters of the weaving parks to explore the feasibility of parking a portion of the subsidy with banks.

The members of the decentralised power loom industry joining the hi-tech weaving park scheme are entitled to specific capital subsidies extended to their investments made under the Textile Centre Infrastructure Development Scheme, Group Workshed Scheme and Credit linked Capital Subsidy (CLCS) scheme for capital equipment.

The powerloom weavers have demanded the removal of benchmarks for used looms (weaving machines) prescribed by the Ministry of Textiles. Such looms are eligible for a 20 per cent capital subsidy allowed under CLCS. The benchmarked value prescription introduced last month by the Ministry for specified second-hand imported loom models, according to the powerloom weavers, does not reflect the true market value of the models. While benchmarking does not apply for other sectors enjoying the benefit of TUFS within the textile industry, there has been no representation from the weaving industry on CLCS, Mr Senthil Kumar has stated.

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