NPA tag haunts Pochampally Park
The Telangana government’s concerted efforts to revive the handloom sector in the state don’t seem to be yielding positive results with entities like Pochampally Handloom Park struggling to raise funds owing to the non-performance asset (NPA) tag that banks have labelled it with.
Set up to weave success for Pochampally handlooms, the park is struggling to raise funds
Hyderabad: The Telangana government’s concerted efforts to revive the handloom sector in the state don’t seem to be yielding positive results with entities like Pochampally Handloom Park struggling to raise funds owing to the non-performance asset (NPA) tag that banks have labelled it with.
Established in 2006 and conceptualised to boost the renowned Pochampally handlooms, the park was developed in public private partnership (PPP) mode by Pochampally Handloom Park Limited at Kanumukkala village near Bhoodan Pochampally in Yadadri Bhuvanagiri district.
The company borrowed Rs 30 crore from Pooled Municipal Debt Obligation Fund (PMDO) floated by a group of 15 banks and financial institutions which include State Bank of India, Vijaya Bank, Bank of India and Life Insurance Corporation. These funds were used to develop infrastructure at the park and meet other establishment costs.
But the company defaulted on repayments and was subsequently slapped with NPA tag. Once a company has been declared as NPA, it can’t raise loans from any bank or financial institution. “No bank is coming forward to lend funds as the company was declared as an NPA. They are checking PAN number of the company in the system and rejecting loan proposals.
A subsidiary bank of NABARD has provided working capital of Rs 80 lakh and we are running the park with the amount which is grossly insufficient,” Damoder Seetha, CEO, Pochampally Handloom Park Limited (PHPL), told The Hans India.
The Comptroller and Auditor General of India (CAG), the country’s tap official auditor, also rapped the PHPL and the State government for the park’s tardy progress.
It highlighted cost overrun, 42-month delay in execution and lack of sufficient working capital. Developed with a total outlay of Rs 35.05 crore in 22.3 acres, the park was designed for 2,000 looms, consisting of 1,495 cotton looms and the remaining 505 silk rooms.
However, only 500 looms were installed as of July 2016, and out of them, only 150 to 200 looms are operated on an average per month due to inadequate working capital and other allied reasons. They generated employment for only 300 to 350 persons on an average per month against the estimated direct employment of 5,050 and indirect employment of 3,000.
Asked what the park was planning to do now, Damoder said: “We have applied for restructuring of the loan three months ago and bankers said they would consider it. But we have not received any response till now”.
He further said that the State government promised to help the park tide over the crisis. “But we have to see what kind of help we get and how it goes,” he said, pointing out that many industries are facing similar NPA problems.
“Funds are essential for the development of the park. We have to pay artisans and other employees. We are hopeful that our loan will be restructured,” he added.
An industry body leader said the government should come to the rescue of the company which had been promoting Pochampally handlooms. “It should convene a meeting of the bankers and company and help in solving the problem,” the leader said.