IPMC

Government Scheme

BACKGROUND OF GOVT. SCHEME

More than 62% of the textiles production in India is done on Powerlooms, most of them being in SSIunits.Out of 23 lakh registered powerlooms producing 54,000 Million Sq. Mt.of cloth and accounting for 57.45 lakh number of direct/indirect employment,only 1.05 lakh looms are shuttleless.Off -take of powerloom sector under TUFS has been negligible (less than 2%). The existing looms are obsolete and high on energy consumption, most of the units are small (4-8 looms). The dependence of units on the master weaver or trader is high, for provision of orders with raw -material, design and an advance on labour given by them. In this Master Weaver Pattern of trade, the majority of units are not better than job workers themselves, weaving cloth to order on a pick -rate basis and employing labour on daily wage basis to run their units. In order to have cohesive, development of the cluster, Government wants entrepreneurs from within the cluster to step forward and be partners with Government in development of the cluster with wide participation for increased cluster profit.

Objective of Govt. Scheme

 Development of clusters that have a concentration of about 5000 decentralized Powerlooms or more by assistance for infrastructure, common facilities, other need based innovations, technology upgradation and skill development.

 . The scheme basically aims at improving the existing brownfield clusters for which a gap filling exercise for each cluster would identify the need based infrastructure that is to be funded.

 . It is expected that the project would ordinarily be implemented within a period of 4 years from the date of formal approval conveyed by the Ministry of Textiles.

Funding Parameters

Keeping in view the plan outlay (Rs.110 cr.) provided for 12 th Plan, the CPCDS assistance of government of India for each approved Powerloom Mega Cluster project would be limited to Rs. 50 cr. inclusive of administrative expenditure, M&E and professional fee during the 12 th Five Year Plan. Also overflow, if any, to go to the next plan.
Interventions will be provided directly to existing weaving units or to an SPV with private equity participation depending on needs of the cluster.

Government grant/equity would be provided with the expectation of matching investment by the industry in the ratio of 60:40 :: Government: Private. That is Rs.60 crore by government grant would be required to mobilise a matching investment of Rs40 crore in the project, however, based on need/financial closure, the ratio may be varied with approval of the PAMC for individual components by exercise of flexibility within this overall ratio of investment.

Implementation Process of the Project

The following shall be the cycle of project identification, approval, execution and monitoring process :- Identification of the Mega Powerloom Cluster by the Ministry which would be funded under the Scheme


Appointment of Cluster Management and Technical Agency (CMTA) by the Ministry through a competitive selection process
Preparation of Detailed Conceptual Report (DCR) by CMTA in consultation with Powerloom stakeholders, which would consist of a diagnostic study of the needs of the cluster, identification of interventions, tentative requirement of land, if any, approximate cost of interventions, approximate total cost, and formulation of implementation strategy. CMTA should emphasis on gap filling exercise for each cluster to identify the need based infrastructure that is to be funded.
Discussion with the Cluster Co-ordination Group (CCG) and on its endorsement, approval of the Detailed Conceptual Report (DCR) by Ministry
Selection of SPV for the identified interventions as per the DCR. The process will be undertaken by-CMTA through a widely published process
Preparation and submission of Detailed Project Reports (DPRs) for the identified interventions, by the CMTA in consultation with SPVs. Such DPRs shall cover technical, financial, institutional and implementation aspects, in line with the Detailed Conceptual Report (DCR) prepared by the CMTA
Endorsement of the DPRs by CCG and recommendations to EFC/ PAMC
Approval of the projects by PAM C
Creation of separate account by SPV for the funds for the project. First release on evidence of readiness for execution of the projects by the SPV as per the approved DPRs
Monitoring of the execution process of SPV by the CMTA
Release of funds to the SPV by the Ministry as per the guidelines and on certification by the CMTA
Quarterly progress reports to the Ministry by SPV/CMTA
Submission of utilization certificates and closure of the projects
Mid-term and end of the term monitoring and impact assessment studies by the Ministry through qualified independent institutions.

Role of Various Committees & Agencies

Cluster Management & Technical Agency (CMTA)

CMTA, apart from assisting the Ministry of Textiles in designing and monitoring of the project, will proactively work with the cluster stakeholdersand the SPV.

Cluster Coordination Group (CCG)

In order to ensure an effective coordination amongst various stakeholders and the SPV at cluster level, a Cluster Coordination Group (CCG) would be set up under the Chairmanship of the respective District Collector.

This CCG would be responsible to examine the DCR/DPRs submitted by CMTA and will make its recommendations to Ministry. CCG will also responsible for local coordination and regular review ofimplementation of the scheme at cluster level. The CCG wouldmeet atleast once in 6 months

Project Approval and Monitoring Committee (PAMC)

In order to approve and monitor the projects sanctioned under the Scheme, a high level committee in the name of Project Approval and Monitoring Committee (PAMC) would be constituted with the following composition:

 Secretary (Textiles) — Chairman

 Additional Secretary & FA, Ministry of Textiles. — Member

 Textile Commissioner, Ministry of Textiles -Member

 Advisor (Industry), Planning Commission — Member

 Joint Secretary (PF-II), D/o Expenditure — Member

 Representatives of other Ministries/Departments-Member

 Representative of the concerned State Government -Member

 Joint Secretary (Mega Cluster), M/o Textiles — Member Secretary