Integrated Processing Development Scheme Objectives, Targets, Benefits And More

Indian government has introduced the Integrated Processing Development Scheme (IPDS), a centrally sponsored initiative specifically crafted to address the challenges confronting the textile industry.

Integrated Processing Development Scheme Objectives, Targets, Benefits And More

Integrated Processing Development Scheme

Integrated Processing Development Scheme: The textile industry plays a pivotal role in India’s economy, contributing significantly with approximately 2% to the GDP and constituting 13% of the country’s exports. In a bid to foster the growth of this vital sector, the Indian government has introduced the Integrated Processing Development Scheme (IPDS), a centrally sponsored initiative specifically crafted to address the challenges confronting the textile industry.

The primary focus of the IPDS is to augment the competitiveness of textile processing units by extending financial support for the modernization and upgradation of their infrastructure. This scheme is anticipated to have a substantial impact on the establishment of both greenfield and brownfield projects, as well as the development of new processing parks. The Ministry of Textiles serves as the nodal ministry overseeing the implementation of the Integrated Processing Development Scheme.

For aspirants preparing for the UPSC Civil Services Exam, the Integrated Processing Development Scheme (IPDS) is a crucial topic falling under the General Studies (GS-2 and GS-3) paper. This article delves into the scheme’s objectives, significance, funding mechanism, the role of Special Purpose Vehicles, and other pertinent details, providing comprehensive preparation material for both the Prelims and Mains stages of the UPSC IAS/IPS exam.

Production Linked Incentive (PLI) Scheme for the Textile Sector

In March 2020, the central government introduced the PLI scheme for Textiles products, encompassing Man Made Fibre (MMF) Apparel, Fabrics, and Technical Textiles. This initiative aims to bolster India’s manufacturing capabilities and augment exports. Notably, the Union Cabinet approved a budget of Rs 10,683 crore for a five-year period in September 2021, coupled with the removal of import duties on cotton.

Integrated Processing Development Scheme (IPDS) Overview

The IPDS, a central government initiative, addresses challenges within the textile processing sector. Launched during the 12th Five Year Plan in October 2013, it draws inspiration from the success of Integrated Textile Parks (ITP). Administered by the Ministry of Textiles, the scheme operates with a financial outlay of Rs. 500 crore.

Under the IPDS, the focus lies on developing four to six brownfield projects and three to five greenfield projects. These projects entail common facilities such as wastewater management plants, testing laboratories, and water supply systems, benefiting clusters of processing units.

Understanding Brownfield and Greenfield Projects

  • Brownfield Project: Involves acquiring, repairing, or leasing existing infrastructure for new production or processing activities. For example, expanding an existing airport is considered a brownfield project.
  • Greenfield Project: Encompasses building new structures in an area lacking prior facilities or infrastructure. For instance, establishing a new airport where none existed before qualifies as a greenfield project.

Objectives of the Integrated Processing Development Scheme

  1. Strengthening the Indian textile industry to enhance international competitiveness.
  2. Adoption of eco-friendly technology in textile processing.
  3. Assisting textile processing units in meeting government-mandated environmental standards.
  4. Promoting a culture of research and development (R&D) in the textile processing sector.
  5. Building and upgrading processing parks for improved productivity.

Key Focus Areas of IPDS

The scheme prioritizes addressing challenges in the textile processing industry, emphasizing:

  • Ensuring a consistent and adequate water supply.
  • Implementing proper wastewater management.
  • Facilitating safe treatment of industrial effluents before disposal.

Targets of IPDS

The primary objectives include establishing four to six brownfield and three to five greenfield projects, addressing the needs of existing Textile Clusters. These projects cover facilities like water treatment and effluent treatment plants, captive power generation plants, and testing laboratories.

Funding Mechanism of IPDS

  • Funding comprises a mix of equity, grant support, and loans.
  • Government of India’s (GoI) grant support is limited to 50% of the project cost, with specified ceilings.
  • The project cost is shared by the Center, State, Beneficiary, and Bank loan in a 50:25:15:10 ratio.
  • Beneficiary contribution through equity (15%) is mandatory upfront.
  • 10% of funding is arranged through bank loans.
  • State governments contribute 25% at the release of the second installment of the GoI Grant.
  • GoI grant is released in three installments.

Agencies Involved in IPDS

Several agencies play crucial roles in the administration, operation, and implementation of IPDS, including Project Management Consultant (PMC), Special Purpose Vehicle (SPV), Project Management Agency (PMA), Project Scrutiny Committee (PSC), and Project Approval Committee (PAC).

Benefits of IPDS

  1. Boosts productivity in the textile sector by upgrading processing technology.
  2. Adopts environmentally friendly processing standards and technology to mitigate climate change.
  3. Enhances global competitiveness by setting up new processing parks.
  4. Encourages private sector investment in tandem with government support.

Special Purpose Vehicle in IPDS

A Special Purpose Vehicle (SPV) is a legal entity established for a specific purpose. In IPDS, SPVs serve as key entities responsible for conceptualizing, formulating, implementing, and managing infrastructure. SPVs ensure self-sustainability and positive revenue streams.

Implementation Structure of IPDS

  • A separate SPV, registered under the Companies Act, is created for each IPDS project.
  • SPV ownership includes Industrial Units, Financial Institutions, and State and Central Governments.
  • Project Management Consultants (PMC) assist in evaluating proposals and monitoring project implementation.
  • Project Scrutiny Committee (PSC) and Project Approval Committee (PAC) provide administrative support.
  • A structured approach ensures effective IPDS implementation and optimal resource utilization.

Integrated Processing Development Scheme: Facts and Figures for UPSC

  • Full Name: Integrated Processing Development Scheme
  • Launch Date: October 31, 2013
  • Nodal Ministry: Ministry of Textiles, Government of India
  • Budget: Rs. 500 crores
  • Funding Pattern: Central government (50%), State government (25%), Beneficiary (15%), Bank (10%)

Way Forward for the Textile Sector

  • Realizing the potential of the textile sector through innovations, technology, and improved infrastructure.
  • Establishment of processing parks and common infrastructure to boost industry growth.
  • Focus on modernizing outdated machines and technologies for comprehensive textile sector development.
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Frequently Asked Questions

What is the purpose of IPDS?

The central goal of the IPDS is to enable the textile industry to achieve global competitiveness by adopting environmentally sustainable processing standards and technology. The scheme aims to assist textile units in aligning with the necessary environmental standards.

What are the benefits of integrated power development scheme?

The Integrated Power Development Scheme (IPDS) encompasses the following components: Strengthening the sub-transmission and distribution networks in urban areas across India. Installation of meters on distribution transformers, feeders, and for individual consumers in urban areas.

What is the full form of IPDS project?

The full form of IPDS is Integrated Power Development Scheme.

What is the IPDS scheme in India?

The Ministry of Power, Government of India, initiated the "Integrated Power Development Scheme" (IPDS) with the primary aim of reinforcing the sub-transmission and distribution network in urban areas.

What is the integrated processing development scheme IPDS?

The Scheme aims to empower the textile processing sector to adhere to environmental standards by employing suitable technology, encompassing marine, riverine, and Zero Liquid Discharge (ZLD) methods.

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