CCEA approves the Scheme for Leather Parks under ILDP
October 23, 2009
As one of the sub-schemes of the Indian Leather Development Programme (ILDP) currently under implementation during the Eleventh Plan period 2007-2012, the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry is proposing to implement a ‘Scheme for Leather Parks”. The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 22 Oct 2009 has approved the Scheme for Leather Parks with an outlay of Rs.300 crore.
In this regard, the Press Information Bureau, Govt. of India has issued a Press Release dated 22 Oct 2009, the text of which is reproduced below:
The Cabinet Committee on Economic Affairs today approved a sub-scheme titled “Development of Leather Park” with an allocation of Rs.300 crore under Indian Leather Development Programme (ILDP). The outlay of Rs.300 crore would include implementation charges @ 3% of the total outlay of Rs.300 crore i.e. Rs.9 crore. The aim of the sub-scheme is to provide the industry with infrastructure facilities for setting up leather units across product categories at one place in an organized manner and to attract large domestic, joint venture and foreign investments into the Indian Leather Industry.
A Leather Park set-up under this sub-scheme would cover all sectors of Leather Industry – tannery, all products categories and leather machinery. A Special Purpose Vehicle (SPV) will have to be set up by entrepreneurs for development and management of park and would be the recipient of the assistance under the Scheme. The SPV would be a company registered under Section 25 of the Companies Act, 1956. The Scheme would provide a grant of 50% of the expenditure for the common infrastructure, capacity building and engineering and construction supervision subject to a ceiling of Rs.40 crore per park. No support would be provided for land and land development. A Project Monitoring Consultant (PMC) would be appointed for effective implementation, monitoring and evaluation of the projects under the scheme.
The Scheme would lead to development of infrastructure for the sector, would address environment concerns specific to the sector, and would facilitate additional investment, employment generation and increase in production
According to information available, the benefits under the scheme will be provided to SPV formed by a group of minimum 7 legally independent companies, which are interested to set up production units in the Park. This scheme would be totally demand-driven and proposal has to be first initiated by the SPV. SPV shall invariably be a non-profit company registered under Section 25 of the Companies Act.
Total Project cost for a Park shall be funded through:
GOI assistance @ 49% of the cost, subject to a maximum of Rs.40 crore
Equity from Industry
Loan from Banks / Financial Institution
SPV would conceptualize, formulate, achieve financial closure, implement and manage the infrastructure. SPV would mobilize funds other than Govt. Grants to executive the project. SPV would allocate sites / plots to the companies for setting-up of production units. Role of State Government is envisaged in certain areas like assisting SPV in identification and procurement of land, providing requisite clearances etc.
Based on the approval of CCEA, the Department of IPP will be issuing the Scheme Guidelines and Procedures. The Council shall circulate the approved guidelines of the Scheme to members of the Council as soon as the same are issued by the Department of IPP.
Members may kindly take note of the above, and await for the scheme guidelines.