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Comprehensive Powerloom Cluster Development Scheme (MCPCDS)

Powerloom Cluster

Comprehensive Powerloom Cluster Development Scheme (MCPCDS)

Comprehensive Powerloom Cluster Development Scheme (MCPCDS) was established to develop Erode (Tamil Nadu) and Bhiwandi (Maharashtra) as Powerloom Mega Clusters. This helps in creating world-class infrastructure to integrate the production chain and to reach the fulfilment of business needs of the local and Small and Medium Enterprises (SMEs). Depending on the approved guidelines, the detailed project reports for Erode and Bhiwandi would be approved by the Government for the development.


  • The scheme intends to enhance the existing brownfield clusters that require a gap filling exercise for each cluster to identify the need-based infrastructure that has to be funded.
  • Develop clusters that have a concentration of about 5000 decentralized Powerlooms or more by assistance for infrastructure, common facilities and other need-based innovations, technology upgradation and skill development.


Economic Advantage: Substantial Increase in Production and Export, increase in the business of small entrepreneurs, savings in cost manufacturers in the cluster due to improving the infrastructure and Government induced benefits, revenue generation to local bodies, State and Central Governments and growth of the industry in an organized form.

Social Advantage: Establishes improved living standards for the existing weavers, artisans and higher per capita income.

Environmental Advantage: Availability of Effluent Treatment Plant and Solid Waste management system, etc. in the cluster.

Fund Allocation

  1. The CPCDS offers assistance to the Government of India for each approved Powerloom Mega Cluster project that would be limited to Rs. 50 Crores including administrative expenditure, Monitoring & Evaluation (M&E) and professional fee.
  2. The convergence with other existing schemes should be attempted, by which only common infrastructure/facilities would be funded.
  3. Additional funds for cluster development will be mobilised by combining the funds that are available under several schemes of the State and Central Governments.
  4. The land for the projects has to be arranged by the SPVs. The land cost will not be taken into consideration for the total cost. In addition to this, Government grants will not be permitted to be utilised for purchase/procurement of land.
  5. Up to 1% of the Government’s grant would be made for administrative expenditure, evaluation, studies, research and seminars, information dissemination, publicity and to establish an IT-enabled monitoring mechanism.
  6. Government funds are provided according to the grant, but it would be considered as a part of the equity in Common Facility Centres (CFCs) or assists in the financial course.
  7. Interventions will be provided directly to the existing weaving units or an SPV with private equity participation based on the cluster needs; Government grant/equity would be provided with an expectation of the matching investment by the industry in the ratio of 60:40::Government: Private. A sum of Rs. 60 Crore would be granted by the Government to mobilise a matching investment of Rs. 40 Crore in the project, based on the need/financial closure, the ratio may differ with the approval of the PAMC for individual components by the exercise of flexibility within the overall ratio of investment.

Project Components

The following are the components of the scheme.

Common Facility Centres

CFCs comprises of the state of art technology that servers users, including enterprises who are unable to individually use those facilities. It runs on the user charge basis, and the facilities set up will be available to all weavers in and around the cluster.

Mini-Industrial Parks

The objective is to establish self-sufficient industrial estates that provide workspace for the units that are within the cluster by enabling them to expand their capacities expect from meeting the compliances.

Innovative Ideas and Other Need-based Interventions

Up to 10% of the budget allocated for the scheme would be utilised for innovative ideas and other need-based interventions that are required for the clusters.

Technology Upgradation

Proposals for technology upgradation has to be prepared in a manner where proposals qualify for dovetailing of funds from the TUFS and funds would be released as approved.

Skill Development

Proposals for technology upgradation has to be prepared in a manner where proposals qualify for combining of funds from the ISDS and funds would be released as approved.

Implementation Process

There are detailed steps for implementation focused on project identification, approval, execution and monitoring process.

  • Identification of the Mega Powerloom Cluster by the Ministry that would be funded under the scheme.
  • Appointment of Cluster Management and Technical Agency (CMTA) by Ministry through a competitive selection process.
  • Preparation of Detailed Conceptual Report (DCR) by CMTA.
  • Discuss with the Cluster Co-ordination Group (CCG) and the approval of the Detailed Conceptual Report (DCR) by Ministry.
  • Selection of Special Purpose Vehicle (SPV) for the identified interventions according to DCR.
  • Preparation and submission of Detailed Project Reports (DPRs) to identify interventions by the CMTA with SPVs.
  • Endorsement of the DPRs by CCG and recommendations to EFC/PAMC.
  • Approval of the projects by PAMC.
  • Create a separate account by SPV for the funds for the project and Monitor the execution process of SPV by the CMTA.
  • Releasing funds to the SPV by the Ministry according to the guidelines and on certification by the CMTA.
  • Quarterly progress reports to the Ministry by CMTA/SPV.
  • Submission of utilization certificates and the closure of projects.
  • Mid-term and end of the term monitoring and the impact assessment studies by the Ministry through qualified independent institutions.

Release of Funds

  1. Funds are released in a phased manner.
    1. The first 3 instalments will be of 30% each of the total fund released by Government of India (GOI).
  2. The fourth and final instalment releases 10% of the total GOI share