Bangalore: As the IT industry is shining with successful entrepreneurs, the government plans its next step to bring about similar growth in success by funding the start-ups dedicated to manufacturing sectors.

“The main idea for this venture is to ensure steady supply of skilled workforce in the labor intensive field that has a huge export potential”, was stated by an anonymous senior government official to ET. The government plans to build a pure venture capital model, upon which it will start aiding the start-ups with a dedicated equity fund. Initially, this project will be focused on the startups related to the textile industry where textile parks will provide the required space for the entrepreneurs and monetary aid will be issued through state-supported Textile Equity Fund.

"The textile ministry is working with SIDBI to launch the first state-supported, dedicated Textile Equity Fund in the next three months, which will ensure easy availability of equity for start-ups as well as expansion for smaller enterprises," the official said. "Going by the experience of the IT sector, the expectation is that after the initial success, markets will provide adequate financing for the equity needs of the textile sector."

Once this government funded model shows success in the textile industry, the same is will be planned for leather and toy industries. In a recently held meeting of the Committee on Manufacturing, headed by Manmohan Singh, the committee arrived at a unanimous decision for the same.

Even with a 45 percent overall growth in the fiscal and production values for the apparel exports, Indian textile export industry is facing a tough competition from Bangladesh both in U.S. and E.U. markets.

"To outgrow the competition, textile ministry needs to tweak their guidelines for textile parks as well as finance the development of flatted factories by readily availing the workspaces to entrepreneurs on rent, hire purchase and sale," said the official, who was also present at the high-level committee meeting.

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