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

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Chapter No: 5– The Special Purpose Vehcileutilized by larger firms who are not a part of the cluster. At present there seem to be noeffective checks and balances to control such tendencies. The guidelines of theprogramme must seriously take this into consideration such checks and balances,especially when a substantial proportion of the funding for such CFCs comes through theprovision of “public” funding. It must be realized that requiring an SPV to be a “clearlegal entity” is not enough and may legitimize the use of public funds for private gain.5.4 The General Profile of Sampled SPVsIt is encouraging to note that there are 11 clusters among our 22 sampled clusterswhere a special purpose vehicle has been successfully formed and registered. Thisimplies that they have completed the earlier stage of the programme cycle involving softinterventions and are now at a relatively more advanced stage of the programme cycle.Of these 11 SPVs, are in Stage II and have only completed their formation andregistration.Yet another SPV has achieved Stage III of the programme cycle, having prepared theDPR for its common facility and obtained its approval. As many as 7 of the 11 SPVsformed have successfully taken their clusters to Stage IV, and are in the process ofconstruction or setting up of their common facilities. There are 2 SPVs namely the SPVfor the Rubber Cluster in Chenganacherry, Kerala and the SPV for the Foundry Cluster,Ahmedabad, Gujarat who have propelled their respective clusters to Stage V by settingup and commissioning their common facilities.The SVPs formed and registered in 5 of the 11 cases belong to relatively smaller clusterswith a lower number of constituent individual units. The SPVs formed and registered inthe remaining 6 cases belong to relatively larger clusters. In the case of smallerclusters, two SPVs have been registered as societies while the remaining three havebeen registered as Private Limited Companies.Likewise in the SPVs formed and registered in the remaining 6 large clusters, as many as5 have been registered as societies and only one as a Private Limited Company. It isseen that in the case of large clusters the preference in organizational form of the SPVseems to be of a Registered Society, though there is one exception that of the RubberCluster, Chenganacherry which is relatively large with about 315 individual cluster units.In the case of smaller clusters the preferred choice of the organizational form of the SPVsis seen to be the Private Limited Company here too there are two exceptions namely theSPV of the Foundry Cluster, Ahmedabad, and the Leather Cluster, Shantiniketan, whichhave been registered as societies. It may be also emphasized that the remaining threesmall clusters are all located in Kerala and have uniformly preferred to register theirSPVs as Private Limited Companies. This preference arises mainly on account of labourmarket conditions, and a chronic fear of political interference in the functioning ofregistered societies. It is seen that for the two small clusters located in Gujarat andWest Bengal, the SPVs have been registered as a societies and not a private limitedcompany. The state of Gujarat has a long and illustrious history of cooperation andGandhian traditions and so does Shantiniketan is West Bengal. The organizational formof the SPVs does not necessarily have any strong correlation with size if one takes intoaccount specific regional factors and traditions. However the preferred organization94
Chapter No: 5– The Special Purpose Vehcilemost suitable for democratic collective action seems to be Societies rather than PrivateLimited Companies.It is also important to emphasize here that, while the effectiveness of soft interventionsare expected to enable clusters in the formation of SPVs, in several cases the SPVs havebeen formed and registered while soft interventions may have continued to linger on. Insuch cases as we shall see subsequently the larger involvement and participation ofcluster members in the formation and membership of the SPVs have been limited andthe inclusiveness of cluster actors in hard interventions has been low.Table No.-5.1: SPECIAL PURPOSE VEHICLES REGISTERED IN SAMPLED CLUSTERSSl Cluster Name TotalNo ofUnits inClusterOrganizational formof SPVYear of SPVRegistrationStage ofOperationViabilityandRankingInitialMembershipPresentMembershipInvolvementandInclusiveness1. Leather GoodsClusterShantiniketan2. Plywood ClusterPerambavoor80 Society 2006 III MVS(12)85 Pvt. Ltd.Company2003 IV VDS(16)10 87 H5 24 L3. Rice MillingCluster Kalady70 Pvt. Ltd.Company2004 IV VDS(15)28 41 H4. Rubber ClusterChengnacherry315 Pvt. Ltd.Company2003 V MVS(9)18 49 L**5. Bell MetalCluster Hazo6. Brass UtensilCluster Pareo7. Foundry ClusterAhmadabad200 Society 2007 IV MVS(13)500 Society 2004 IV MVS(8)76 Society 2006 V VDS(18)346* NA H100 124 H41 41 L8. Plastic ClusterAluva108 Pvt. Ltd.Company2006 IV MVS(1)24 24 L9. SurgicalInstrumentsCluster Baruipur10.11.Wet GrinderClusterCoimbatoreWhite WareCluster Khurza600 Society 2007 IV MVS(7)700 Society 2005 IV MVS(6)494 Society 2007 II MVS(4)180 180 H30 30 L10 10 LNote: *Multiple memberships from same household allowed.**Low in account of statutory limits on shareholders (individual) however holding companyoptions are available.MVS- Most Viable and Sustainable VDS – Viable but Difficult to SustainL – Low H - HighYet another interesting observation based on Table 5.1 is that of the 11 SPVs formedand registered as many as 8 (73 percent) belong to clusters, which are categorized asmost viable and sustainable (MVS). This clearly indicates that there is a definite positivecorrelation between SPV formations and the Viability and sustainability of the clusterbased on its specific cluster configuration. It is therefore necessary to evolve verycomprehensive guidelines for the conduct of the diagnostic study which must incorporateproper measures of cluster density, scale of operations, measures of homogeneity andheterogeneity and other critical measures that can then be weighed against the desiredand clearly stipulated norms for the initial and critical selection of the clusters for95
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EVALUATION STUDY OF MICRO & SMALLEN
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2.12 PROGRESS AND PRESENT STATUS OF
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INDEX OF TABLESTable No.- 1.1: CLUS
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COMMONLY USED ABBREVIATIONSBDSBusin
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31 million persons spread over 12.8
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Nevertheless, it is expected that t
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4. Role of the schemes in bringing
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Table No. - 1.1 (contd.)East/ North
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ANNEXURE - 1.1 Guidelines for Clust
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• Approval of budget and leveragi
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14. Contribution of the Ministry of
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Chapter No:2 - The General Profile
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