Modified Industrial Infrastructure Upgradation Scheme (MIIUS)

Industrial Infrastructure Upgradation Scheme (IIUS) was originally launched in 2003 to improve the industry standards by enhancing the infrastructure of the start-ups through

Public-Private Partnership (PPP). The scheme was reformulated and extended during the 10th and 11th plan to provide aid and support for the technical upgradation for the new ventures. A total assistance of Rs.2549 Crores and 39 projects were sanctioned under the scheme. Based on the performance, the National Productivity Council (NPC) evaluated the productivity and extended the Modified Industrial Infrastructure Upgradation Scheme (MIIUS) during the 12th year plan with an allocation of Rs.1,030 Crores.

Objective of the Scheme

The Modified Industrial Infrastructure Upgradation Scheme (MIIUS) aims at achieving the below-listed objectives:

• To increase the competitiveness of the industries by providing quality infrastructure
• To encourage and boost industrial growth
• To provide technological upgradation and
• To create new employment opportunities

Scope of the Scheme

The Scheme covers the basic need-based components which are evaluated through a diagnostic study. The eligible components that are liable for availing the assistance are as follows:

1. Physical Infrastructure

• • Solid Waste Management Disposal and treatment
  • Water Supply
  • Roads
  • Captive Power Plant

1. Social Infrastructure

• • Dormitories
  • Hostels for Working women

1. Technical Infrastructure

• • Common Facility Centre (CFCs)
  • CETP and other environmental protection infrastructure
  • Training Infrastructure
  • Research and Development – Product Development and Technical Demonstration Facility
  • Quality Certification

Fund Allocation Under the Scheme

The Cabinet Committee on Economic Affairs (CCEA) has approved the sum of Rs.1030 Crores under the scheme and the allotted funds spent in the following ways:

• 450 Crores for the committed expenses for the already initiated projects during the 10thand 11th five-year plan.
• 580 Crores for the initiation of the new projects limiting one per state.
• 10% of the total fund is reserved for the projects in North Eastern Region (NER) and Sikkim.

Fund Allotment Pattern

The pattern under which the fund is allotted under the scheme is as follows:

• The Central Government releases 50% of assistance out of the total project cost or50 Crores, whichever is lesser.
• The State Implementing Agencies (SIAs) allots 25% of the fund out of the total project cost and the remaining 25% grant is contributed by beneficiary industries and other financial institutions.
• A sum of 1.25 Crores is released by the Central government for the improvement of physical infrastructure.
• 5% of grant is released to improve the industry monitoring mechanism and handle the administrative expenses.

Eligible Agencies 

• SIAs such as State Industries Development Corporations (SIDC) can apply for the scheme.
• Agencies having past experience in handling and executing the project are only eligible to apply for the scheme.
• States with better implementation of IIUS in 10th & 11th Five Year Plan shall be given priority.

Operating Mechanism of the Implementing Agency

Promotion of industrial infrastructure development is the responsibility of the State Government, and it focuses on backward areas where other central schemes are unapproachable. The MIIUS scheme is monitored and launched by the State Implementing Agency. It works under the following procedure to carry out the smooth process of the project execution.

• Identifying the potential Industries Estates/Parks/Areas
• Funding the new or already existing Industries through SPV-led clusters
• Addressing the project proposals through SIA-led implementation route
• Preparing a Detailed Feasibility Reports (DFR) including the technical, financial, institutional and implementing aspects of the projects
• Working with the State Industrial Development Corporations(SIDCs) in accelerating the project execution and sharing the project cost
• Finishing up the unfinished projects from the 10thand 11th
• Formulating the activities of the enterprises, implementing and monitoring its progress
• Submitting the proposal as per the norms of the SIA’s Annual Action Plan
• Purchasing the land for the project in case of building a new industrial park/estate
• Conceptualising, formulating, implementing, operating and maintaining the industry infrastructure
• Leverage the funds from financial institutions and assist the projects to overcome any shortfalls in the completion of the project
• Obtain the statutory approval from the other departments before its implementation
• Drafting the operating parameter well-in-advance to be self-sustaining with the positive revenue stream
• Arrange for a Reserve Fund Account for Operation & Management purpose and utilise it during the revenue shortfalls
• Follow the Government of India’s rule and make use of the allocated fund transparently to purchase the goods, services and equipment for the upgradation of the industry infrastructure.

Project Approval Methodology

The Apex Committee adopts the two-stage approval system to carry out the implementation process. They are,

1. ‘In-Principle’ Approval

• • The committee evaluates the DFR submitted on the basis of:
  • Commitment of SIA
  • Project location
  • Land details
  • Financial capabilities
  • Proposed details of the project and
  • Willingness for the implementation
  • The committee then issues an ‘In-Principle’ approval which is valid for six months from the date of issue.

1. Final Approval

The final approval is granted by the Apex committee after taking into consideration of the following key aspects:

• • Physical ownership of the land
  • Land must be purchased and registered under the name of SIA
  • Financial Appraisement
  • Details and the proof of contributions from all the stakeholders
  • Information about the fund allocation must be mentioned in the SIA budget
  • Sanction letter must be provided for the contribution of the Financial Institutions
  • In case of external financing, appraisal note from the bank must be submitted for Department of Industrial Policy and Promotion (DIPP)’approval
  • In the case of self-financing, an appraisal note from the State/Central Financial Agency must be submitted.
  • Comprehensive DPR
  • A detailed report on the specifications of machinery and equipment and the estimation of its cost must be produced to the committee
  • Technical compliances
  • Implementation schedule and
  • Copies of all the projects required in the project must be submitted to qualify for the final approval of the committee.

Disbursement of the Fund

The Ministry of Commerce and Industry disburses the fund to the SIAs in three instalments:

1. The first instalment of 30% is released by the Ministry after confirming that the SIA and the industry has already obtained their 30% contribution in their Trust & Retention Account (TRA)
2. The second instalment of 40% of the approved fund is released to the agency after making use of 22.5% of the project cost and validating that the SIA and other stakeholders received their 70% of their authorised contribution in their registered bank account.
3. The third instalment of 30% of the agreed grant is released after obtaining the utilisation certificate for the 1stinstalment and after the exploitation of 52.5% of the project cost and after verifying that SIA and other stakeholders already obtained their complete approved contribution in their registered bank account.