ILDP sub-scheme ‘Development of Leather Parks’

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Scheme for Development of Leather Parks

No.CLE / ILDP / Leather Park /2009-10
Nov 16, 2009

Members of the Council,

Dear Members

Sub:ILDP sub-scheme “Development of Leather Parks” – reg.

As members are aware, the Department of Industrial Policy & Promotion (IPP), Ministry of Commerce & Industry, Government of India is implementing an Indian Leather Development Programme (ILDP) for the overall industrial growth of leather sector in the country during the Eleventh Five Year Plan period 2007-2012. Vide Notification No.5/17/2007 dated 29th August 2008, the sub-schemes of the ILDP has been notified with a combined outlay of Rs.912.67 Crores. The ILDP lays thrust on several areas such as modernization of production facilities, upgradation of technologies, expansion of production capacities, setting up of institutional facilities, skill development of fresh manpower, skill upgradation of existing manpower, development of rural artisans, address environmental concerns in the tanning sector, propagating India as an attractive destination for joint venture collaborations/FDIs in the foreign markets.

Further to above, the Council wishes to inform you that the Department of IPP is proposing to implement a scheme for ‘Development of Leather Parks’ with an objective to create additional capacities in the leather sector and assist the industry in addressing the infrastructure needs of the entire leather sector in a holistic manner. The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 22nd Oct 2009 has approved the Scheme for ‘Development of Leather Parks’ with an outlay of Rs.300 crore.

Accordingly, the Department of IPP has notified the Scheme for ‘Development of Leather Parks’ vide Notification No.5/15/2008-Leather dated 05th Nov 2009. A copy of the Notification along with Scheme Guidelines is attached herewith for your information and reference. The Scheme Guidelines can also be browsed from the websites of Department of IPP and CLE

As per the notified scheme guidelines, a group of minimum 7 legally independent companies which is interested to set up production units in the Park, may form a Special Purpose Vehicle(SPV). 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 @ 50% of the cost, subject to a maximum of Rs.40 crore per park, and equity from Industry and Loan from Banks / Financial Institutions.

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.

The SPVs so formed by the industry members, may submit the preliminary proposal directly to the Department of IPP seeking in-principle approval of the Government. The various details required for submitting the proposal to the Department of IPP has been mentioned under Para 9.10 of the Scheme Guidelines.

Member-exporters may kindly go through the Scheme guidelines. Interested members may consider promoting the Leather Parks by joining hands as a group of 7 independent units and by forming and registering SPV under Section 25 of the Companies Act.

With warm regards,

Ali Ahmed Khan
Executive Director
Council for Leather Exports