Govt announces workshed scheme for setting up modern looms

09 Aug '10

6 min read

The EA is expected to be in possession of required land before submission of Project report to the Govt. There should be industrial N.A, Layout approved, Building plan approved by specified authority and necessary approach road to the land.

There would be an Executing Agency (referred as EA) for setting up of project under this scheme which may include the State Govt. or its agency, a registered Co-operative Society or a Company set up under companies act 1956, by a group of powerloom owners (minimum of four beneficiaries) or by the local powerloom association.

The EA would prepare a detailed project report, for the purpose of availing of subsidy under the scheme indicating the below salient features to the Powerloom Development Cell (PDC) at the Office of the Textile Commissioner, Mumbai, through its Regional Office of the Textile Commissioner with an advanced copy to PDC.

The schedule of rates of CPWD as in that state shall be used, as the basis, for arriving at the cost estimates of construction of powerloom building. The beneficiary (ies) should give a written undertaking to the effect that the proposed powerloom building, for which assistance is being availed under the scheme, shall be used only for the purpose of installing looms and the preparatory machinery of benchmarked technology and shall not be utilized for any other purpose.

It is expected that a powerloom unit availing of subsidy should at least function for a minimum lock-in period of three years of same ownership from the date of disbursement of subsidy.

The EAs will open an escrow account with any schedule bank and all payments for MWS will be made through escrow account which will be jointly operated by one member of EA and one member from Regional Office. After receipt of this communication of approval of the project by PAC & opening of escrow account the beneficiary would take up the construction. Initial 30% advance will be given only if the land is mortgaged to Govt. of India on first charge or 2nd charge. If the land is not mortgaged, 30% of the total GOI share will be released subject to the proportionate expenditure.

Financial Assistance & funding pattern –
Under this scheme, subsidy for construction of Powerloom building would be limited to 40% of the unit cost of construction subject to a maximum of Rs. 160/- per sq. ft. The maximum permissible subsidy per beneficiary shall be restricted to Rs 12.00 lakh (including the subsidy for infrastructure benefit, i.e. internal road to the extent of 10% of eligible expenditure) to cover installation of 48 numbers of modern looms (auto or single shuttleless looms) or 24 numbers of wider width shuttleless looms @ Rs. 160 per sq. ft.

Release of subsidies -
30% of the total GOI share in advance, after approval of the project by the PAC, provided the land is mortgaged to GOI on 1st charge or 2nd charge, If land is not mortgaged, then no advance will be given, but prorata re-imbursement will be done in ratio of 30:30:40. 30% of the total GOI share after the utilization Certificate of 1st installment and after the proportionate expenditure approved by a govt. approved architect & LLMC. 20% of the total GOI share will be released after the successful completion of the construction of the worksheds and balance 20% will be released after installation and satisfactory working of the machineries.

Fibre2fashion News Desk - India

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