3. Integrated Development of Leather Sector Scheme (IDLSS)

PURPOSE

Increase employment opportunities, productivity and competitiveness in the global market for the Leather Industry to have access to timely and adequate capital for upgrading its technology levelleading to productivity gains, right-sizing of capacity, cost cutting, design and development.

Validity of the Scheme

Upto 31.03.2017, based on the extant instructions received from the DIPP.

Eligible PLIs

Banks(as decided by DIPP). Financial Institutions (FIs).

Nodal Agencies

As on date, SIDBI is the only Nodal Agency for release of subsidy under the scheme in respect of PLIs / SIDBI assisted cases as also self-financed units in both MSME and non-MSME sector.

Eligible Borrowers

Sole Proprietorships Partnerships Private and Public Limited Companies in MSME and othersector.

Eligibility

 New / Existing Entrepreneurs (for Leather industries)  All existing units in leather and leather products including tanneries, leather goods, saddlery, leather footwear and footwear component sector undertaking viable and bankable programmes on technology up-gradation are eligible for assistance.  All existing unit’s in leather and leather products including tanneries, leather goods, saddlery, leather footwear and footwear component sector having cash profits for 2 years, undertaking viable and bankable programmes on technology up-gradation on or after 29th August, 2008 are eligible for assistance. With a view to attract investment into the sector assistance for establishment of new units would also be provided. However, preference would be given to existing units. Assistance to new units would be restricted to setting up of plant and machinery. However, assistance to new units would be considered only if the project is appraised to be bankable and viable by the bank providing loan in case of loan cases and by bank in which the unit has a working capital loan account in case of self finance case.  All existing units in leather and leather products in existence for at least three years and having cash profits for at least two years as on November 03, 2005 would be considered as an existing unit.  Modernization programmes funded by SIDBI/Banks as well as those programmes undertaken by existing production units from their own resources are eligible for assistance.  Assistance shall be available only for such projects in which the loan has been sanctioned by SIDBI/Banks/FIs on or after November 03, 2005.  In case of self-financed modernization programme, assistance under the scheme to be available only for such projects where the order for the purchase of machinery has been placed on or after November 03, 2005 and subject to necessary documents being filed as per format while making the application under the present scheme.

Other Eligibility

 Technology Up-gradation will include Modernization of Tanneries, footwear units, footwear components units, leather goods, leather garments &saddlery units.

 Procedure:

 The unithas to apply for assistance in a prescribed application form (IDLS- I) in triplicate to the concerned PIU.  The unit shall then apply to the concerned Bank/FI in the prescribed form for loan.  The bank on sanction of loan will forward the application with their comments and recommendations as well as letter of sanction to PIU preferably within a month.  PIU will then present the applications along with financial appraisal from bank and technical inputs from PIU to Steering Committee for decisions and approval.  Accordance of sanction by the Steering Committee; both technical and bankability appraisal by SIDBI/Bank will be taken into consideration .  In case unit has no loan component, it would send the proposal to the bank in which the unit has a working capital account and in case the unit does not have a working capital account then the bank in which it has a current account for financial appraisal of the project.  The assistance to the units would be released by SIDBI to the Bank Loan Account of the units in respect of loan cases and to the working capital Loan Account of the units in case of self finance cases and release proportionate amount of assistance eligible as per the machines installed at site to the beneficiary units.  PIU will be responsible to the DIPP for providing technical and other assistance in the implementation of the scheme. Maximum Ceiling of loan eligible for support

(a) Cases prior to August 29, 2008

I. Investment subsidy on plant & machinery cost 30% for MSE and 20% for non- MSE units), subject to a ceiling of ` 50 lakh for technology Upgradation/ modernisation and/or expansion and setting up a new unit.

(b) Cases subsequent to August 29, 2008

I. The subsidy amount would be @ 20% for all units (both MSE and non-MSE) above ` 50 lakh, subject to ceiling of ` 2Cr.

II. The cost of upgradation under the scheme will include:

I. Bill value of machines, II. Sales and excise tax, III. Transportation and transit insurance cost, IV. Import related duty, V. Installation and commissioning charges including civil and electrical work restricted to 5% of total land cost of machine.

Note : For more details of the scheme, please visit DIPP website http://dipp.nic.in/schemes_dipp.htm.

Progress Review as on March 31, 2017

As on March 31, 2017, Rs.296.30 crore have been processed/ disbursed by SIDBI for subsidy to 1775 units.