Integrated Development of Leather Scheme

Integrated Development of Leather Scheme (IDLS)

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Integrated Development of Leather Scheme (IDLS)

The IDLS or Integrated Development of Leather Scheme is an initiative from the Government of India. It was launched by the Department of Industrial Policy and Promotion (DIPP) in December 2017. The primary objective of this scheme is to upgrade the technology and production of the leather manufacturing industry. It is also aimed at encouraging entrepreneurs to set up and diversify new units in various areas as specified by the Government.

Objective

The scheme also has been announced with the objective of giving a fillip to formal employment opportunity in the leather industry which is very labour-intensive. This scheme is being implemented with a paperless system and it uses online portal and has the facility for the active interface of PIU (Project Implementation Unit), DIPP (Department of Industrial Policy and Promotion) and the various units that are stakeholders under this scheme.

Two Arms of DIPP

CLRI and FDDI are the two arms of DIPP (Department of Industrial Policy and Promotion). They are working in tandem as Project Implementation Units (PIU) for the IDLS or Industrial Development of Leather Sector for a three year period of 2017 to 2020. It will be essentially for the tanneries and other related product units. The product units include leather and non-leather footwear, leather goods, footwear components, leather garments accessories amongst others.

Eligibility Criteria

  • The scheme is open to all existing units in the Footwear, Leather and other accessories including tanneries, saddlery, leather goods, leather footwear, footwear component sector and non-leather footwear.
  • The units should have a cash profit for 2 years. They also should be continuously undertaking successful and bankable programs on technology up-grading on or after January 1, 2016.
  • The scheme also is open to new units provided they meet certain criteria. The new units seeking assistance under the Integrated Development of Leather scheme would be considered only if the project is evaluated and appraised. It should be found to be bankable and viable by the bank that will be providing the GOI assistance.
  • In case the units are capable of self-financing, then the project viability will be done based on the strength of the working-capital of such units.

Other Requirements

The applicants seeking financial and other assistance under the above program should provide below-listed documents

  • EPFO registration details of existing employees.
  • If there are any modernization programs that have been funded by Scheduled banks for certain units, these units will also fall under the purview of this assistance program.
  • Units that are running various programs from their own resources will also be eligible for assistance under IDLS.
  • The scheme is open only to those leather and other allied units that have availed financial assistance from Scheduled banks for the purchase of new machinery. Units that have bought second-hand units and machinery will not fall under the purview of this scheme. This is because the program is only to support those who are keen on technology upgrading and modernization.
  • The assistance under the scheme is also tied to the number of jobs the units would be able to create. For every Rs.1 Crore investment in Garment/Footwear and Saddlery sector, the unit should be able to generate 250 jobs.
  • For an investment of Rs.5 Crore with assistance under the above scheme, the unit should be able to generate 350 new jobs. This will be applicable for Tannery Units and it will be on a pro-rata basis depending upon the level of investment.
  • If the unit is a component or accessory one, then it should be able to create jobs for 150 people for the assistance of Rs.1 Crore under the above scheme.

Quantum of Assistance

The assistance under this scheme has been increased to Rs.3 crores and 30% of the total investment is earmarked to the MSME units. The release of actual funds in the form of assistance would be made to the units through CLRI and FDDI for their respective requirements.

The investment assistance under IDLS will be for a maximum extent of 30% for the cost of plant and machinery. This will be for small & medium enterprises and also for micro industries. The maximum amount of assistance will be 20% of the cost of plant and machinery towards plant and machinery. The assistance will be basically for the upgrading of technology. Also, it will be for setting up technology-enabled new units subject to a ceiling of Rs.3 crores. The cost will cover the following:

The cost incurred towards commissioning and installation. This includes electrical and civil work subject to a maximum of 5% of the total landed cost of the machinery.

Implementation Mechanism

Monitoring & Administrative Setup

The agency for implementation of IDLS will be PIU or Project Implementation Unit. It will be an arm of IDLS. Since the scheme has a large scope, the PIU will function from two centres. The first one will be from CLRI, Chennai and this will be for tanneries. The other controlling centre will be FDDI, Noida and this will cater to footwear, footwear components, saddlery, leather garments and goods, and various other accessory units.

The monetary assistance for those the eligible units will be through a scheduled bank. The CLRI and FDDI would be paid a maximum fee of 1% of the total GOI Assistance under the scheme. This fee will be based on the assistance amount approved the Steering Committee for the cases that have been appraised. The banks would also be eligible for fees for the services rendered by them. This will be capped to a maximum of 0.5% of the total GOI assistance that has been released to the approved units.

There will be regular awareness programs held at various places for the dissemination of information regarding the scheme. The Steering Committee will decide on the time and necessity of such schemes. They will take into account the schematic outlay that is available for sub-schemes during the period.

The Steering Committee will be empowered for the effective implementation of the scheme, and will also define the scope and also lay down the procedures for the same. It also will decide on the list of various plant and machinery and also suggest the normative price for such equipment that might be required for modernization program of the various leather and affiliated units. They also will liaison with the GOI for sanction of the assistance and disbursal of the financial assistance to the respective units.

Other Terms and Conditions

Once the appraisal has been made and the proposal has been sanctioned, the scheduled bank will execute an agreement on behalf of the Government of India. This will be with the industrial unit who is being given assistance. The agreement will have to be executed before the financial disbursement is given. The financial assistance will be given by the banks only upon the arrival of the machines at the sites and after the execution of the above agreement.

  • As mentioned above, the assistance will be limited to 20% of 30% of the cost of the machines. The maximum ceiling will be Rs.3 crores for each product line.
  • The assistance cannot be used for any other purposes other than the purpose for which it has been sanctioned by the GOI. The amount released by GOI towards this scheme cannot be utilized for adjustment of default in principal and interest by the borrower.
  • The unit will be required to submit a completion certificate to the scheduled bank and also to DIPP and PIU in a format to be decided by the steering committee.
  • Once the project has been completed, the industrial unit will be required to submit a report regarding the performance and operation of the unit. This should also include employment generation. This should be for a period of two years from the date of receipt of assistance from GOI. The information should be submitted in the form decided by the Steering Committee. The above reports should be submitted to the scheduled banks and PIU. PIU will then appraise the Steering Committee of the same.
  • For any reason, if the industrial unit becomes non-operational within two years of receiving the GOI assistance under IDLS, then it is bound to refund the assistance availed along with interest. The interest will be calculated from the date of closure till the date of refund. The interest rate will be calculated at the PLR or Prime Lending Rate of the scheduled bank. In case of non-compliance, the Scheduled Bank is within its power to take legal action.
  • If it is found that the assistance has been received by the unit by submitting false information, then the Unit should refund the total assistance amount, plus interest at PLR. The rate of interest will be calculated from the date of the detection of such fraudulent information till the date of refund.

Forms And Format

The proposal for assistance should be submitted using the right forms and formats. The forms are and formats are as follows:

  • IDLS Scheme Form II
  • Bankability Appraisal Format Self Financed Proposal
  • Declarations From The Unit
  • Affidavit
  • Agreement
  • IDLS – III

Please refer this link for complete details of the various formats and declarations – https://www.fddiindia.com/Services-new/projects-implementation.php


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