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Objective
To support existing tanneries for undertaking modernization programs for positive environmental impact, becoming competitive, effecting better capacity utilization, achieving productivity gains, reducing wastages etc

Eligibility Criteria

All existing tannery units undertaking viable modernization programme will be eligible for assistance. ‘Modernization’ will include the following:

Measures for technology upgradation and productivity improvement

Measures for machinery/facilities upgradation

Measures, at individual tannery stage, for adoption of waste treatment technologies including primary treatment of waste.

Modernization programs funded by Industrial Development Bank of India (IDBI)/Small Industries Development Bank of India (SIDBI) / State Financial Corporations / Banks eligible for refinance from SIDBI/IDBI) as well as those undertaken by existing tanneries from their own resources will be eligible for assistance.

Financial assistance under the scheme shall be available only for such projects in which the loan by the bank/financial institution has been sanctioned on or after the notifying the scheme. In the case of self-financed modernization undertaken by the units, financial assistance under this scheme shall be available for such projects where the order for purchase of machinery has been placed on or after the date of notifying this scheme and subject to necessary documents being filed while making the application for assistance under this scheme.

The project should lead to:

• Demonstrable increase in unit value realisation and/or
• Increase in production capacities and/or
• Better compliance of pollution control norms

Purpose

Financial assistance would be available for undertaking the following activities

• Replacement of pit technology
• Installation of controls and float recycles
• Lay-out and reorganization of tanneries
• Installation of instrument process control systems
• Acquiring in-house chrome recovery and reuse facilities
• Upgrading of finishing facilities
• Non-conventional energy applications
• Creation of in-house chrome recovery and reuse facilities
• Automation of process and control systems
• Replacement of obsolete machines
• Any other activities as decided by steering committee
• Existing tannery units have option to go for single or multiple activities

Quantum of assistance
The assistance will be limited to 30% of cost of machines in case of small scale units and 20% for non-small scale units. The cost of machines will include Bill value of machines, Sales and Excise Tax, Transp[ortation and transit insurance and Customs duty. Installation cost and expenses for foundation and civil construction will not be included for the above purposes. The upper ceiling of assistance to an industrial unit will be limited to Rs 28 lakhs and Rs 35 lakhs for small scale and non-small scale units respectively.

Terms of assistance
An agreement will have to be executed prior to disbursement. The assistance will be released after arrival of machines at site and at every stage it will be limited to 20 or 30 percent of the cost of the machines, as the case may be. Industrial unit will be required to submit operational and performance details upto two years from the date of completion to the designated agency. The assistance released would be adjusted towards loan component earmarked for the machines required for the modernization programme.

Procedure for Sanction and Disbursement
The implementing agency would be Project Management Unit of National Leather Development Programme (PMU NLDP). The Nodal Agency for release of assistance, monitoring and interface and coordination with Financial Institutions, Banks and the Government would be SIDBI.

In case of loan availed by an industrial unit for modernization programme, the industrial unit will apply for the assistance in a prescribed application form to the concerned financial institution, state financial corporation, bank. They will be forwarding the application along with the recommendation and letter of sanction to Programme Management Unit of National Leather Development Programme for consideration of sanction of assistance by a steering committee constituted for the purpose.

The steering committee will comprise of

• Nominee of SIDBI
• Nominee of CLRI
• Representative of DIPP (Leather)
• Representative of DCSSI
• Representative of Finance Wing of DIPP
• National Programme Manager of SIDE-NLDP (Convenor)

In case of programme involving no loan component, the industrial unit will be required to apply in prescribed application form to SIDBI directly and they would be forwarding it to PMU of SIDE-NLDP for sanction by steering committee.

After sanction of the assistance, financial institutions/banks will get an agreement executed by concerned industrial unit on behalf of the government of India. The assistance will be released after execution of agreement and arrival of machines at site by concerned Financial Institutions/ Nationalized Banks / State Financial Corporations.

In case of non-small scale units going to avail assistance from Industrial Development Bank of India, application for assistance will be submitted to SIDBI only which will get required formalities completed from IDBI/All India Financial Institutions and will be sending the same to PMU-NLDP for consideration of Steering Committee.

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