The government has approved the launch of a new Integrated Processing Development Scheme (IPDS) with a total cost of Rs. 500 crore to establish four to six Brown Field projects and three to five Green Field projects to address the environmental issues faced by textile processing units. The scheme will provide government assistance in developing common infrastructure to boost private-sector investment in major processing clusters. The scheme parameters call for government assistance to be limited to 50% of the project cost, with a maximum limit of Rs.75 crore.
Important Terms/Definitions
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Committee on Economic Affairs: The increase in the MSPs for all Kharif crops of the 2016–17 growing season has received agreement from the Cabinet Committee on Economic Affairs (CCEA), which is presided over by Prime Minister Narendra Modi.
Project Scrutiny Committee
The Project Scrutiny Committee (PSC), chaired by the Joint Secretary, Ministry of Textiles, will review and evaluate project proposals submitted by PMCs. The following individuals will serve on the Project Scrutiny Committee:
- Adviser(Industry), Planning Commission or his nominee
- Department of Expenditure Joint Secretary (PF-II) or his nominee
- Department of Commerce Joint Secretary (Infrastructure) or his nominee
- Department of Industrial Policy and Promotion Joint Secretary (IIUS) or his nominee
- Joint Secretary, Ministry of Environment & Forests or his nominee.
- Textile Commissioner, Mumbai
- Economic Advisor, Ministry of Textile
- Director/Deputy Secretary, IFW, Ministry of Textile
- Director (SITP/ IPDS), Ministry of Textiles
The Project Scrutiny Committee will evaluate all PMC proposals in terms of project components, viability, feasibility, and time lines. The Committee will investigate the projects’ utility in terms of supply and management chain modernization and integration, and will make final recommendations to the Empowered Committee.
Funding Pattern
The Special Purpose Vehicle will fund the project with a combination of equity from industry members, grants from the Ministry of Textile / State Government, and loans from Banks and Financial Institutions. The grant from the Government of India under the scheme would be limited to 50% of the project cost, with a maximum of Rs.75 crores for projects using Zero Liquid Discharge Systems and Rs.10 crores for projects using conventional treatment systems. Support for marine discharge projects would be considered on an individual basis, with a maximum ceiling of Rs.75 crores.
The Center, State, Beneficiary, and Bank Loan will bear 50:25:15:10 of the project costs, respectively. The following conditions will be met before the release:
- Beneficiary contribution of 15% of project cost will be made up front, with the remaining 10% funded through bank loans. The State Government contributed 25% when the second instalment of the GOI Grant was released.
- The GOI grant (50% of the total Project cost) will be released in three instalments, with 50% of the GOI grant released initially following beneficiary contribution (1st installment)
- Once the plant is operational, the GOI grant will be reduced by 30%. (2nd installment)
- Once the plant has been operational for three years, the GOI will provide a 20% grant (3rd installment)
Project Approval Committee
A Project Approval Committee will be formed to consider and approve the recommendations of the Project Scrutiny Committee, which will be headed by the Secretary (Textiles), Additional Secretary & Financial Adviser, Ministry of Textiles, and Joint Secretary, Ministry of Textiles in charge of IPDS. The PAC will also have discretionary and interpretive powers.
Objectives
- The IPDS’s main goal is to help the textile sector adopt environmentally friendly processing standards and technologies so that it can compete on a worldwide scale.
- Advance the textile industry and make it competitive on a global scale.
- To help textile processing units to achieve environmental criteria imposed by various authorities of the government.
- To promote research and development (R&D) initiatives focused on eco-friendly technology.
- To build new industrial parks and renovate current ones in order to increase production.
Features
- As part of IPDS, parks will be built with values and lifestyle that clusters of processing units can use, like water supply systems and effluent treatment plants.
- The IPDS would build new processing parks, support the upgrading of current processing clusters, particularly in the field of water and waste water management, and encourage research and development for environmentally friendly processing technology.
- The plan would make it easier for the textile factories to adhere to the necessary environmental regulations.
Benefits
- By establishing new processing parks and implementing environmentally friendly processing standards and technologies, the IPDS will assist the textiles industry in being competitive on a worldwide basis.
- It will encourage research and development activity in the textile processing industry as well as help the upgrading of current processing clusters and centers, particularly in the area of water and waste water management.
Special Purpose Vehicle
- A Special Purpose Vehicle (SPV) will be created for implementation reasons for each project that receives approval under the Integrated Processing Development scheme.
- It must be a corporation that is officially recognized by the Companies Act.
- When operating autonomously, the SPV will adhere to the rules set forth by the government.
- It will be held collectively by
1.Industrial businesses operating in the park
2.Financial Institutions
3.Central government State government - The processing park’s land will be purchased by SPV. Since the cost of the land is not taken into account for in the project’s overall cost, IPDS does not provide financial support for it.
- It is in charge of securing bank loans to establish processing facilities inside the park.
- The SPV, which will also charge users for the same, is in charge of maintaining the processing park fall’s facilities.
- Any licenses or permits required to develop communal facilities in the park will also be handled by SPV.
Agencies working with IPDS
The Integrated Processing Development Scheme is being implemented by a number of additional organizations in addition to Special Purpose Vehicles (SPVs). These organizations are:
| Project Management Consultant (PMC) | A panel of advisors chosen by the Ministry of Textiles, aids in the use of money, collects data on the project’s development, and evaluates proposal submissions. |
| Project Scrutiny Committee (PSC) | Which evaluates the projects for feasibility after submission to the PMC, is headed by the Joint Secretary to the Ministry of Textiles. |
| Project Approval Committee (PAC) | Which is headed by the Secretary to the Ministry of Textiles, provides administrative support to the programmed. |
| Project Management Agency (PMA) | After PAC approval, the SPVs appoint the Project Management Agency (PMA), which is in charge of creating the project plan and providing other implementation support. |
| Operation and maintenance (O&M) agency | Agency is in charge of providing the SPV’s assets with professional maintenance for a minimum of 15 years. |
Implementation
The project would be implemented through the establishment of separate Special Purpose Vehicles (SPVs), each of which would be a Corporate Body registered under the Companies Act. The SPV will be owned by the processing park’s members (Industrial Units), financial institutions, state and federal governments. The SPV will have operational autonomy to carry out the scheme within the guidelines established by the Government of India.
The Government of India would appoint a panel of Project Management Consultants (PMC) to assist it in evaluating proposals for viability, disbursement/utilization of funds released to the SPV, and periodic monitoring of project implementation. The PMC shall also provide other need-based advisory services to the government in order for the scheme to be implemented effectively. In order to provide administrative support to the scheme, the Government of India would also form a Project Scrutiny Committee (PSC) led by the Joint Secretary-Ministry of Textiles and a Project Approval Committee (PAC) led by the Secretary (Textiles). The Project Management Agency (PMA) for the project will be appointed by the SPV. However, the SPVs must only enter into an agreement with the PMA after receiving approval from the PAC.
The Project Management Agency (PMA) for the project will be appointed by the SPV. However, the SPVs must only enter into an agreement with the PMA after receiving approval from the PAC.
Project Proposal Development
The project proposal will be developed in consultation with the PMC, following the completion of a diagnostic study assessing the need for infrastructure and other facilities. PCB and environmental standards for water supply and waste disposal may differ depending on the park’s location. The proposal must be written in accordance with local regulations.
The following criteria must be considered when selecting technology for processing parks:
- BAT, or Best Available Technology, is a proven track record.
- Technology approval by an independent agency or the relevant PCB
- Effluent treatment strategies at a reasonable cost
- Proposals must also include an effective waste sludge management technique.
Role of Government of India
The project will be funded by the SPV using funds from the following sources:
- Equity from industry participants
- Grants from the Textile Ministry
- State government financial assistance
- Bank and other financial institution loans
- The government funds for the project will be transferred to the SPV via a Trust & Retention Account (TRA) at any nationalized bank.
FAQs
Question 1: What are the objectives of Integrated Processing Development Scheme (IPDS)?
Answer:
- The IPDS’s main goal is to help the textile sector adopt environmentally friendly processing standards and technologies so that it can compete on a worldwide scale.
- Advance the textile industry and make it competitive on a global scale.
- To help textile processing units to achieve environmental criteria imposed by various authorities of the government.
- To promote research and development (R&D) initiatives focused on eco-friendly technology.
- To build new industrial parks and renovate current ones in order to increase production.
Question 2: What does the Integrated Processing Development Scheme seek to accomplish?
Answer:
The Scheme’s goals are to help the textile processing industry comply with environmental regulations by using the right technology, such as marine, riverine, and zero liquid discharge methods (ZLD).
Question 3: What granted the Integrated Processing Development Scheme’s start the go-ahead?
Answer:
The introduction of a new Integrated Processing Development Scheme (IPDS) with a total cost of Rs 500 crore during the 12th Five-Year Plan has been approved by the Cabinet Committee on Economic Affairs (CCEA).
Question 4: Which areas are the IPDS focusing on?
Answer:
- Adequate and timely supply of water
- Wastewater management
- Safe treatment of effluents before disposal
Question 5: Discuss the scheme’s scope.
Answer:
The needs of the existing Textile/Clusters will be addressed by 4-6 Brown field and 3-5 Green field projects, according to IPDS’ proposal. The following projects would be eligible under the programme:
- Group A: Water treatment and wastewater treatment technology(including marine, Riverine and ZLD).
- Group B: Common infrastructure, such as captive power producing facilities using, preferably, green or renewable technologies.
- Group C – Common locations like testing labs and R&D facilities.