Evaluation Study MSE Cluster Development - Ministry of Micro ...

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(DPR) for the CFC together with appraisal report prepared by a bank (if bank financing isinvolved) or an independent Technical Consultancy Organisation/reputed Consultant willhave to be submitted in such cases.13.1.b. With the grant-in-aid sought from the Government, the proposed CFC must befinancially and operationally as viable as any commercial project. As a result, all CFCproposals should comply with the financial norms of appraisal that a commercial bankwould seek, e.g., internal rate of return, break-even point analysis, debt-servicecoverage ratio, sensitivity analysis, etc., using basic templates such as projected profit &loss account and projected balance sheet for the proposed CFC. The proposed CFC mustalso justify its need in terms of its likely impact at the level of an individualrepresentative enterprise of the group that it intends to benefit.13.1.c. In keeping with the objective as stated at the beginning of paragraph 13.1.babove, CFC projects would be classified and the Central Government (viability gapfunding) assistance therefore would be based on the following broad norms:Developmental CFC projects: Central Government support of 70 per cent of the projectcost and the remaining to be provided by the State Government concerned and theproject beneficiaries.Quasi-Developmental CFC projects: Central Government support of 50 per cent of theproject cost and the remaining to be provided by the State Government concerned andthe project beneficiaries.Quasi-Commercial CFC projects: Central Government support of not more than 30 percent of the project cost and the remaining to be provided by the State Governmentconcerned and the project beneficiaries.However, in case of clusters of micro and / or village enterprises, i.e., enterprises withinvestment in plant and machinery (excluding land and building) in each case notexceeding Rs. 25 lakh, the extent of Central Government assistance may be raised to 80,60 and 40 per cent of the project cost in the three types of CFCs respectively.In all the cases stated above, the entire cost of land and building shall be met by SPV /State Government concerned.13.2. Implementing agencies shall be responsible for setting up and commissioning ofthe CFC on a turn-key basis. The CFC thus established will have to be run by the SpecialPurpose Vehicle (SPV) on commercial lines, with enough current revenue surplus to meetall its current expenses as well as cost of replacement/expansion of assets as and whennecessary. Ministry of SSI shall not accept any financial liability arising out of operationof any CFC.13.3. The formats for proposals in this regard are given in Part II of the enclosures(Annex V and VI). The guiding principles elaborated in Part II need to be gone throughcarefully.24
14. Contribution of the Ministry of SSI to the total cost of the project will be decidedkeeping in view the availability and willingness of other stakeholders and partners likeState governments, industry associations, firms in the cluster etc. For further details offunding scales, reference is invited to Part I and Part II of the enclosures to theseguidelines. Implementing agencies (including State Governments, cluster beneficiariesand/or their SPVs) are expected to mobilise resources to fund the remaining cost, asdetailed in Part I/II of the enclosures.Linkages with Business Development Services (BDS)15. Development of capacities of BDS providers to meet the needs of small enterprisesand establishing linkages between them and small enterprise clusters constitute apriority area of the cluster development strategy. Therefore, the proposed clusterdevelopment activities should include establishment of linkages between the cluster unitsand the BDS providers in the public and private sectors capable of catering to the needsof small enterprises.Dovetailing with Other Schemes of the Ministry of SSI/ARI and Schemes of OtherMinistries of the Government of India16. Implementing agencies will be encouraged to dovetail the cluster developmentinitiatives with other Schemes of the Ministry of SSI/ARI. Similar schemes of otherMinistries of the Government of India should also be tapped.17. Implementing agencies may, wherever necessary, seek assistance from technicalagencies like the Product and Process Development Centres and Central Tool Rooms ofthe Ministry of SSI as well as the Central Glass and Ceramics Research Institute, CentralLeather Research Institute, Technology Information Forecasting and Assessment Counciland other similar institutions of other Ministries and Departments of the Government ofIndia engaged in technology up gradation of client enterprises, including SSIs.Formats and Approval of Project Proposals18.1. The proposals for seeking financial assistance from the Ministry of SSI should bemade in the formats given in Part I and Part II of the enclosures to these Guidelines.These formats, though quite detailed, are still illustrative and necessaryadditions/amendments to the contents may be done by the implementing agencies,depending on the nature of the cluster and the proposed activities.18.2. The proposals will be considered and approved by the Steering Committee of theSmall Industry Cluster Development Programme under the chairmanship of Secretary,Ministry of SSI for projects costing Rs. 1 crore and above and of the DevelopmentCommissioner (SSI) for projects costing less than Rs. 1 crore. However, projects costingRs. 5 crore and above will be scrutinised on file by the office of DC(SSI) in consultationwith FA, before putting up to the Steering Committee for approval.Disbursement of Funds25
Page 1 and 2: EVALUATION STUDY OF MICRO & SMALLEN
Page 3 and 4: 2.12 PROGRESS AND PRESENT STATUS OF
Page 5: INDEX OF TABLESTable No.- 1.1: CLUS
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Page 21 and 22: ANNEXURE - 1.1 Guidelines for Clust
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Chapter No: 3 - The Cluster Develop
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Chapter No: 4 - Soft Interventions
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Chapter No: 5- The Special Purpose
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Chapter No: 6 - Hard Interventions
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Chapter No: 7 - Conclusions nd Reco
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