Transcript Document

Empowered Group of Ministers
(EGoM)
on
Cluster Development
1st Meeting : 09.07.2007
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TERMS OF REFERENCE
1.
To review the existing cluster development
programmes/ projects/ schemes being implemented by
the Ministries/ Departments of the Central Government in
accordance with the ToR.
2.
To specify broad policy guidelines and implement measures to
bring about harmonization and synergy among these
programmes/ projects/ schemes and enhance their
outcomes in the XI Plan period including results in terms of
promotion of manufacturing, renewing industrial towns
and building new industrial townships etc. and
3.
To decide any other matter considered important or
relevant.
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MINISTRIES/ DEPARTMENTS/
COMMISSIONS/ COUNCILS
CONSULTED
 25 consulted.
 7 Ministries (8 Departments)
-- MoMSME
-- MoFPI
-- MoRD
--Banking
-----
MoT
DIPP
DoC
MoPR
 16 Schemes/ Programmes.
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Ministries Consulted
S.
#
1
Ministry
/Deptt.
MSME
Name of Scheme
a)
b)
c)
d)
2
DIPP
a)
b)
3
Commerce
4
Textiles
a)
b)
c)
Micro & Small Enterprises Cluster Development
Programme.
Growth Poles Proposed by NCEUS (under
consideration)
Clusters for SC,ST, etc. (under consideration)
Scheme of Fund for Re-generation of Traditional
Industries (SFURTI)
Industrial Infrastructure Upgradation Scheme
(IIUS).
Industrial Park Scheme
Special Economic Zone (SEZ)
Scheme for Integrated Textile Parks (SITP)
Integrated Handloom Cluster Development Prog.
Babasaheb Ambedkar Hastshilp Vikas Yojana
(BAHVY)
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Ministries Consulted
S.
#
Ministry/
Deptt.
5.
FPI
6.
RD
7.
Financial
Services
8.
Panchayati
Raj
Name of Scheme
Scheme for Infrastructure Development.
Provision of Urban Amenities in Rural Areas
(PURA)
a) Project UPTECH of SBI
b) Cluster Development Programme of SIDBI.
c) Cluster Development Programme of
NABARD
Rural Business Hubs
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1.
MoMSME
Micro & Small Enterprises Cluster
Development Programme (MSECDP):
 SCOPE:
i)
Holistic approach – several types of interventions.
ii)
Soft interventions like capacity building, exposure, etc.
iii) Hard interventions like technological improvement,
Common Facility Centres (CFC), etc.
iv) Creation/ up-gradation of physical infrastructure.
 FINANCIAL PARAMETERS:
Max. project cost Rs. 10 Cr. – GOI share 30% - 80%.
 Interventions in 69 clusters, GOI cost- Rs 47.04 Cr.
 Diagnostic study of 148 clusters.
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MoMSME
2. Growth Poles proposed by NCEUS:
 SCOPE:
A. Integrate several clusters for expanding production &
employment in unorganised enterprises.
B. Improve the infrastructure with PURA principles.
 I Phase:
Institutional strengthening & Capacity Building
(GOI=1/3 of Rs. 12 Cr. Per Pole).
 II Phase:
Actual Pilot Pole on P.P.P. Mode
(GOI : Pvt. = 1:5)
 DPRs for 6 pilot projects taken up:
- UTTARAKHAND
- CHHATTISGARH,
- WEST BENGAL
- RAJASTHAN
- ASSAM
- KERALA
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3. Clusters Proposed for SC,ST, etc.

MoMSME
TARGET:
 Rural unemployed youth, esp. SC/ST & minority etc. to take up
micro enterprises in every Block
 Train 500 per Block / year.
 Create Industrial Sheds etc. in rural areas for 150 per Block /
Year

FINANCING:

SCHEME:
* GOI = 80% * State = 10% * User = 10%
Parameters being worked out in consultation with Planning
Commission.

Rs.1200 Cr. from different GOI schemes, State Govt. & users during
XI Plan.
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MoMSME
4. Scheme of Fund for Re-generation of Traditional
Industries (SFURTI)
 SCOPE:
 Establishment of competitive traditional industries in KVI & Coir.
 Building innovative & traditional skills, improved technologies,
etc.
 Charkha-replacement , CFCs, Product Development & Design
Intervention, Market Promotion, Capacity Building, Training, etc.
 Interventions in 104 clusters (29 Khadi, 50 V I & 25 Coir).
 FINANCIAL PARAMETERS:
 GOI assistance between 75% and 100%.( Rs.1 to 2 Cr.)
 Minimum 25% contribution from Implementing Agencies.
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DIPP
1. Industrial Infrastructure Up-gradation Scheme
(IIUS):
 SCOPE:
To enhance competitiveness of the industry by providing
quality infrastructure through P P P in functional clusters.
 FINANCIAL PARAMETERS:
 GOI assistance - 75% subject to ceiling of Rs 50 Cr per
project.
 User industries - minimum of 15%
 PURPOSE AND NATURE OF GOI ASSISTANCE:
One time Central assistance for physical infrastructure.
 So far 26 clusters have been taken up under IIUS.
 Rs 579.10 Cr released so far.
 Proposed XI Plan outlay Rs. 1200 Cr.
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2. Industrial Park Scheme:
DIPP
 SCOPE:
Encourage investment in development of industrial parks, etc.,
in which high quality infrastructure is made available in a
centralized manner, so that the units operating from such parks can
have the benefit of lower transaction cost and shorter start up time.
 FINANCIAL PARAMETERS:
Tax incentives – Developer eligible for 100% deduction of
profits and gains from the industrial park for a period of 10
consecutive years in a block of 15 assessment years.
 PHYSICAL AND FINANCIAL ACHIEVEMENTS:
So far 270 approvals given under the Scheme for claiming tax
benefit u/s 80 IA of IT Act.
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3. Special Economic Zones:
DoC
 SCOPE:
– For economic
manufacturing
development,
export
promotion
&
boost
– Provide industrial townships, so that increased economic activity
does not create pressure on the existing infrastructure.
– SEZ Developer responsible for all civic amenities / infrastructure in
SEZ.
 FINANCIALS: No Govt. grant , only Incentives.
Developers get :* I-Tax exemption for 10(of 15) yrs. U/s 80/1AB of IT- Act .
* Custom, Excise exempt.
* MAT, DDT, CST,ST exempt.
 Exporters get : * Duty free imports
* MAT, CST,ST etc. exempt.
* I-Tax exempt u/s 10AA [100% 5 yrs & 50% next 5 yrs]
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Special Economic Zones (Contd):
DoC
 CONTRIBUTION OF OTHER STAKEHOLDERS :
– Delegation of powers to enable single point handling of land use,
labour regulations, environmental issues, etc., through DC (SEZ),
– To exempt the SEZ area from levies like Octroi, Sales Tax, etc.
 ACHIEVEMENTS:
– Total 101 SEZs / 32,578 employed.
– Rs.35,145 Cr. Private Investment
– SEZ Exports in 2006-07 = Rs 34,787 Cr.(52% growth).
– Projected exports for 2007-08 = Rs. 67,300 Cr.
– Of 1298 functional units in SEZs, 1107 (85%) are MSMEs.
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MoTex
1. Scheme for Integrated Textile Parks
(SITP):
 SCOPE:
Provide world class infrastructure facilities by setting up Textile
Parks through PPP mode for the textile units.
 FINANCIAL PARAMETERS:
– Grant or Equity based assistance provided.
– 40% of the project cost (infrastructure) up to Rs. 40 Cr.
– Total state / Central Govt. / PSU equity up to 49%.
X PLAN OUTLAY :30 projects (Rs.88.27 Cr.) sanctioned.
XI PLAN (Proposed):
 Rs.2000 Cr. for 50 ITPs proposed
 BE 2007-08: Rs.435 Cr to complete 30 ITPs
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MoTex
2. Integrated Handloom Cluster Development
Programme:
 SCOPE:
Holistic development of handloom clusters.
 FINANCIAL ASSISTANCE:
Recurring and non-recurring grant up to 4 years.
– 100 % of project cost (infrastructure) up to Rs.2 Cr.
– CFCs to be on PPP Mode 80:20.
– X Plan - 20 Clusters developed, 100 under study.
– XI Plan - Rs. 173 Cr. (300 clusters) proposed .
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3. Babasaheb Ambedkar Hastshilp Vikas
Yojana (BAHVY):
MoTex
 SCOPE:
i) Develop Handicrafts clusters for empowering artisans
ii) Organize artisans into community-based enterprises
 FINANCIAL PARAMETERS:
• Need based assistance (usually Rs.75-125 lakhs, as
75% grant).
• CFCs etc. to be on PPP Mode 80:20.
 ACHIEVEMENTS:
701 projects (Rs.98.5 Cr.) taken up in the last 6 years.
 PROPOSED XI PLAN OUTLAY: Rs. 496 Cr.
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Scheme for Infrastructural Development:
MoFPI
 SCOPE: To provide infrastructure & common facilities for
food processing, packaging, marketing, providing
intelligence platform to SMEs and setting up of testing
laboratories for quality assurance & quality control
through initiatives for Food Parks, Packaging Centres,
Integrated Cold chain facilities, etc.
 PURPOSE AND NATURE OF GOI ASSISTANCE: Grantin-aid for provision of common facilities like cold storage,
food testing and analysis laboratory, effluent treatment
plant, common processing facilities, power, water supply,
etc., on one time basis.
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Scheme for Infrastructural Development
MoFPI
(Contd):
 CONTRIBUTION OF OTHER STAKEHOLDERS: Assistance
is restricted to 33.33% of the project cost in difficult areas
and 25% in General areas subject to a ceiling for different
interventions.
 PHYSICAL / FINANCIAL ACHIEVEMENTS:
 Till 2006-07 - 54 FOOD PARKS / Rs.203.5 Cr.
 X Plan outlay
:
 XI Plan outlay (proposed) :
Rs. 180 Cr.
Rs. 3160 Cr.
[ Mega Food Parks on PPP/SPV model proposed]
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MoRD
Provision of Urban Amenities in Rural Areas
(PURA):
 SCOPE: To bridge the rural-urban divide and achieve
balanced socio-economic development by providing physical
and social infrastructure in the identified rural clusters to
further their growth potential.
 FINANCIAL PARAMETERS: Viability gap funding as per the
needs. Concerned States are expected to source additional
funds or meet requirements by convergence from other
programmes run by Central/ State Governments.
 PURPOSE AND NATURE OF GOI ASSISTANCE: Grant-inaid on one time basis for providing physical and social
infrastructure in identified rural clusters to bridge critical gaps
and further their growth potential.
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MoRD
Provision of Urban Amenities in Rural Areas
(PURA) ( Contd.):
 CONTRIBUTION OF OTHER STAKEHOLDERS :
– 100% centrally sponsored. The States were supposed to
converge funds from existing schemes into selected
clusters.
 X PLAN OUTLAY :
– Rs. 20 Cr. ( 7 clusters) during 2004-05 & 2005-06.
– Rs. 10 Cr. Provision in 2006-07.
 XI PLAN (Proposed):
– Rs. 5950 Cr.
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MoF
1. Project UPTECH of SBI:
 SCOPE: Upgradation of technology of SMEs in the cluster
for making them more competitive quality and cost wise.
 FINANCIAL PARAMETERS: Implemented
Bank’s funds only, no GOI assistance.
with
the
 CONTRIBUTION
OF
OTHER
STAKEHOLDERS:
Sporadic contribution – Detailed guidelines not available.
 PHYSICAL AND FINANCIAL ACHIEVEMENTS: Rs 3 Cr.
incurred on development of 24 clusters.
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MoF
2. Cluster Development Programme of SIDBI:
 SCOPE:
Upgrade Technology, Skills, Market etc.
 RESULT:
48 Clusters
intervention.
intervened,
50
clusters
identified
for
 No specific scheme on cluster development. Mainly functioning
as implementing agency of the Government run schemes for
cluster development and also doing part funding.
 FINANCIALS : No Govt. assistance, Partly from World Bank
Fund.
NB:
- SIDBI (term loan), Bank (WC) have coordination problem
- SIDBI does not lend below Rs. 10 lakhs/ Most Micro units
can not benefit.
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MoF
3. Cluster Development Programme of NABARD:
 SCOPE: Holistic development of clusters.
 FINANCIAL PARAMETERS:
 No GOI assistance extended. 2 modes:
A. On participative mode :- Rs.15 lakhs for Cluster.
B. In intensive development mode: 100% grant up to
Rs.1.00 Cr.
 ACHIEVEMENTS:
 X Plan:- 65 Clusters (Rs.1.82 Cr.)
 XI Plan (Proposed):- 46 Clusters (Rs.21.9 Cr.) &
9 more Clusters (Rs. 12.5 Cr.)

SPECIAL FEATURES:-Focuses on clusters based on agro &
allied activities, food processing, small and micro enterprises in
rural areas, traditional arts, such as handicrafts and
handlooms.
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Rural Business Hubs:
MoPR
 SCOPE:
It is envisaged as Public-Private-Panchayat Partnership
for combining latent skills at local community level
production and marketing networks of CII member
companies to reach larger markets by developing latent
livelihood skills for additional financial returns to local
craftsmen, farmers and entrepreneurs. Joint initiative of
Ministry of Panchayati Raj and CII.
 PURPOSE AND NATURE OF GOI ASSISTANCE:
GoI and State Governments to facilitate the signing of
MoUs between Panchayati Raj Institutions and Private
Companies. No financial assistance by GOI.
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MoPR
Rural Business Hubs ( Contd.):
 CONTRIBUTION OF OTHER STAKEHOLDERS :
The financing of RBHs is envisaged as a business
proposition
on
the
public-private-panchayat-partnership
principle which could be supported by such ‘top-up’ funds as
may be available for the purpose. It is also expected that PRIs
will converge Centrally Sponsored Schemes and State
Government Schemes for funding RBH in rural areas. Support
is also envisaged from institutions like NABARD, KVIC, etc.
 ACHIEVEMENTS:
– 846 RBHs identified & 97 MOUs signed.
– Marketing Links Established.
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Observations:
1. There are differences in the perception as to what constitutes
a cluster from scheme to scheme, even within the same
Ministry.
2. The relevant schemes (overlapping, at times) could also be
categorized as under: a) Schemes assisting the technical upgradation, etc., of
enterprises in existing small clusters.
b) Schemes promoting infrastructure development in existing
clusters.
c) Schemes assisting establishment of new estates/clusters.
3. There are both: (a) specific-sector or product-specific grouporiented schemes, like those of Handicrafts, Handlooms,
Textiles, SFURTI and Food Processing; and (b) schemes
applicable for different sectors like IIUS, MSECDP, etc.
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Observations ( Contd.):
4.
Cluster schemes could also be categorized as:a) Those involving direct government assistance (by way of
budgetary allocation), and
b) Those involving exemptions/tax incentive-oriented benefits
for developers.
5.
So far, cluster development schemes are designed only for
manufacturing enterprises and not for service enterprises.
6.
Almost schemes (current form) introduced 2-4 years ago.
7.
All of them went through “Learning Curves”
8.
Unanimity : Focus on “Cluster”-rather than dispersed
“Scattered”assistance.
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Thanks You
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