Comprehensive Powerloom Cluster Development Scheme (MCPCDS)

The Comprehensive Powerloom Cluster Development Scheme (MCPCDS) was established to develop strategic Powerloom Mega Clusters in Erode (Tamil Nadu) and Bhiwandi (Maharashtra). This initiative aims to create world-class infrastructure, seamlessly integrate the production chain, and fulfill the business needs of local Small and Medium Enterprises (SMEs). According to the approved guidelines, detailed project reports for Erode and Bhiwandi would be subject to government approval, facilitating their development into thriving clusters.

Objectives

Enhance existing brownfield clusters through a targeted gap-filling approach, identifying and funding necessary infrastructure improvements.
Develop clusters with a concentration of over 5000 decentralized Powerlooms by providing infrastructure assistance, common facilities, technology upgrades, and skill development opportunities.

Deliverables

Economic Advantage:

The scheme anticipates a substantial increase in production and export levels, the growth of small enterprises, cost savings for manufacturers due to improved infrastructure and government benefits, and enhanced revenue generation for local, state, and central governments. This initiative fosters the growth of the industry in an organized manner.

Social Advantage:

Elevated living standards for weavers and artisans are anticipated, along with increased per capita income levels.

Environmental Advantage:

Clusters will benefit from the availability of Effluent Treatment Plants and Solid Waste Management systems, contributing to a cleaner environment.

Fund Allocation

MCPCDS provides the Government of India's assistance for each approved Powerloom Mega Cluster project, capped at Rs. 50 Crores, covering expenses such as administration, Monitoring & Evaluation (M&E), and professional fees.
Efforts should be made to converge with other existing schemes to fund only common infrastructure and facilities. For more information, visit MSME Cluster Development Programme.
Additional funds may be mobilized through the combination of various state and central government schemes.
SPVs are responsible for land arrangement. Land costs will not contribute to the total project cost, and government grants cannot be used to purchase land.
Up to 1% of the government grant can be allocated for administrative expenses, evaluations, research, seminars, publicity, and establishing an IT-enabled monitoring mechanism.
Government funds can be considered equity in Common Facility Centres (CFCs) or assist with financial arrangements.
Interventions will target existing weaving units or SPVs with private equity participation, with a government grant-to-private investment ratio of 60:40, though exceptions may apply. For a related initiative, refer to SIDBI Cluster Development Fund.

Project Components

The Comprehensive Powerloom Cluster Development Scheme involves several components:

Common Facility Centres

Common Facility Centres (CFCs) provide state-of-the-art technology accessible to all users, including enterprises unable to access these facilities independently. Operating on a user-charge basis, these facilities serve weavers in and around the cluster. For insights, see Comprehensive Handicrafts Cluster Development Scheme (CHCDS).

Mini-Industrial Parks

Mini-Industrial Parks aim to establish self-sufficient industrial estates providing workspace for cluster units, enabling capacity expansion and compliance fulfillment.

Innovative Ideas and Other Need-based Interventions

Up to 10% of the scheme's budget is dedicated to supporting innovative ideas and need-based interventions essential for cluster development.

Technology Upgradation

Proposals for technology enhancement must qualify for funds from schemes such as the Technology Upgradation Fund Scheme (TUFS), ensuring efficient fund utilization. More information is available at MSE Cluster Development Programme.

Skill Development

Skill development initiatives are integrated with existing funding schemes like the Integrated Skill Development Scheme (ISDS) to ensure timely release and application of funds.

Implementation Process

Identification of eligible Mega Powerloom Clusters for scheme funding by the Ministry.
Appointment of a Cluster Management and Technical Agency (CMTA) by the Ministry via a competitive selection process.
Preparation of a Detailed Conceptual Report (DCR) by CMTA.
Discussions with the Cluster Co-ordination Group (CCG) and DCR approval by the Ministry.
Selection of Special Purpose Vehicle (SPV) for intervention implementation per the DCR.
Preparation and submission of Detailed Project Reports (DPRs) by CMTA with SPVs for intervention identification.
DPR endorsement by CCG and recommendations to EFC/PAMC.
Project approval by PAMC.
Creation of a separate SPV account for project funds; monitoring of execution by CMTA.
Funds release to SPV by the Ministry based on CMTA certification and guidelines adherence.
Quarterly progress reporting to the Ministry by CMTA/SPV.
Submission of utilization certificates and project closure.
Mid-term and end-term monitoring, along with impact assessment studies by qualified institutions.

Release of Funds

Funds are released in phases:
1. The initial three installments each release 30% of the total fund allocated by the Government of India (GOI).
The fourth installment releases the remaining 10% of the GOI's share.

For further reading on related schemes and guidelines, please see the article on Comprehensive Powerloom Cluster Development Scheme (MCPCDS).

Back to Learn

Frequently Asked Questions

Common questions about Powerloom Cluster Development in Erode & Bhiwandi.

The MCPCDS is a scheme established to develop world-class infrastructure for powerloom clusters in Erode (Tamil Nadu) and Bhiwandi (Maharashtra). It aims to integrate the production chain and fulfill the business needs of local and small and medium enterprises (SMEs) in these clusters.

The main objectives are to enhance existing brownfield powerloom clusters, develop clusters with at least 5000 decentralized powerlooms, and provide assistance for infrastructure, common facilities, technology upgradation, and skill development.

The scheme aims to provide economic advantages such as increased production, exports, and savings in cost for manufacturers. It also aims to improve social standards and living conditions for weavers and artisans. Additionally, it seeks to provide environmental benefits through facilities like effluent treatment plants and solid waste management systems.

The scheme offers assistance of up to Rs. 50 crores from the Government of India for each approved Powerloom Mega Cluster project, including administrative expenses, monitoring, and evaluation.

The scheme provides a grant from the Government of India, which is considered as equity in Common Facility Centres (CFCs) or other interventions. The government's contribution is expected to be matched by private investments in a 60:40 ratio.

The main components include Common Facility Centres (CFCs), mini-industrial parks, innovative ideas and other need-based interventions, technology upgradation, and skill development.

The Ministry identifies the mega powerloom clusters to be funded, and a Cluster Management and Technical Agency (CMTA) is appointed. The CMTA prepares a Detailed Conceptual Report (DCR), which is discussed with the Cluster Coordination Group (CCG) and approved by the Ministry.

SPVs are selected for identified interventions based on the DCR. They prepare Detailed Project Reports (DPRs) with the CMTA, which are endorsed by the CCG and approved by the Project Approval and Monitoring Committee (PAMC).

The CMTA/SPV submits quarterly progress reports to the Ministry. Mid-term and end-term monitoring and impact assessment studies are also conducted by the Ministry through independent institutions.

Funds are released in a phased manner, with the first three installments being 30% each of the total Government of India share. The fourth and final installment is 10% of the total share.