Funding matters, but it’s not the solution

Aakanksha Shrawan 15th February 2018

The budgetary allocation of INR 7, 148 crores to Textiles and Garments industry during Union Budget 2018-19 saw an increase of around 14 per cent in comparison to the amount allocated last year (2017-18) i.e. INR 6226.5 crores. Thisin itself should be a reason to cheer for the people working in the industry. This labour-intensive sector currently employs 45 million people and a higher budgetary allocation might provide a further push to employment. However, there is a need to focus on the half-empty, not the half-full, cup of incentives that have been extended to the sector. A higher allocation for a sector does not directly imply higher benefits for the intended beneficiaries. This may be a result of either inefficient utilisation of funds or expenditure of funds under wrong heads.

The Textile industry, being one of the focus sectors under Make in India campaign, has seen a number of schemes and incentives coming its way over the last few years. Two of the major schemes are: Integrated Skill Development Scheme (ISDS) and Scheme for Integrated Textile Parks (SITP). While ISDS seeks to address the manpower requirements of this diverse sector, SITP aims to provide world-class infrastructure to this industry in terms of incubators, warehouses and processing and development centres.

With regard to ISDS, the government has set up around 3, 250 training centres which are present across India including remote and backward locations .Evidence, however, shows that this Scheme has only been partially effective. During 2015-16, the Textile and Handloom Sector Skill Council certified 19, 378 workers. A Report by Ministry of Skill Development and Entrepreneurship pegs the annual requirement of manpower at 13, 40, 000. This shows that there is a huge mismatch between the supply and demand of labour force in this Sector which needs to addressed right away.

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Note: Views expressed in this blog are those of the author.