The Department of Ayush has proposed a Rs 500 crore central sector scheme to develop 20 clusters for small scale ISM industries in the 11th five-year plan with industry support.
The scheme, in collaboration with a professional consultancy organization like the Infrastructure Leasing & Financial Services Limited (IL&FS), is to cater technology and up gradation requirement of these units for development of common facilities relating to raw material standardization and quality control of furnished products. Till now twenty-six locations have been mapped out as possible clusters.
Cluster locations identified for development would be based on a diagnostic study with emphasis on providing physical infrastructures as identified in the cluster. Priority would be given to develop clusters having small industry concentration, according to the proposal.
The scheme would be a public - private partnership initiative and the central assistance would be by way of one time grant-in-aid (not equity) to the Special Purpose Vehicle (SPV) formed by the cluster associations for development of the infrastructure. The assistance will be restricted to 75 per cent of the project cost subject to a ceiling of Rs 25 crore. The remaining 25 per cent will be financed by other stakeholders of the respective cluster with a minimum industry contribution of 10 per cent of the total project cost.
The cost of the land contributed by the Industry shall be treated as part of the Industry. Government funding will be confined only to a promotional component. The Government, under the scheme, would fund creation of durable assets and activities relating to productivity enhancement and no recurring expenditure except on a Programme Facilitation Unit for three years.
Till now one detailed project report has been forwarded by the Govt. of Kerala for setting up of such an Ayush cluster by a consortium supported by Kerala State Industrial Infrastructure Development Corporation and Thrissur based Ayush manufacturing units. It proposes setting up of the following common facilities including standardization and quality control laboratory, raw material store and testing laboratory, common production facilities with sophisticated machines like gelatine capsule filling, automatic capsule filling, automatic coating machine, modern packaging facilities, IT and marketing facilities and a herbal nursery.
The proposal of Ayush would also be supported by the Ayurvedic Drug Manufacturer's Association (ADMA), in which the Association will ensure the industrial participation. Ranjit Puranik, general secretary ADMA said, "This is the first of its kind of a project since independence. The department is considering the proposal, which is being discussed now". He said, that the ADMA would focus on facilitation and co-ordination among more and more industries, to support the venture, quality control and research infrastructure and make sure that the sharing fast tracks the growth of the proposed venture.
As per the proposal, funds will be made available in three instalments of Rs 9 crore, Rs 8 crore and Rs 8 crore directly to the implementing agency. Funds will be kept in a separate account, which will be audited by reputed chartered accountants empanelled by the Department of Ayush.
The stakeholders in the development of the cluster location would be the private companies, industrial associations, premier R&D institutions, financial institutions, infrastructure development organizations, local authority, and both central and state governments being mandatory.
A detailed and exhaustive project proposal supported by data, surveys or projections, and feasibility on growth potential of the cluster location along with the application form in prescribed format would be submitted for scrutiny and approval of the apex committee.
The qualifying criteria for the selection of clusters will be decided on the basis of number of units, persons employed (direct and indirect), value of output, value of export and export potential, economies of scale and growth potential, past track record of industry and associations, nature of critical gaps in infrastructure (physical and others), implementation schedule, structure of SPV and ability of the individual units to contribute 15 per cent of the project cost.
In case the financial institutions contribute to the cost of the project then appraisal done by financial institutions can be accepted otherwise Department of Ayush would get the project appraised by the professional consultancy organization like the IL&FS, which is retained for the administration of the project. The Department of Ayush would do the project implementation monitoring and evaluation and the professional consultancy organization retained for this purpose.