Industries and Minerals - State Planning Commission - Tamil Nadu

8. INDUSTRIES AND MINERALS

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Industries and Minerals

jhsh©ik v‹D« jifik¡f© j§»‰nw

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- ÂU¡FwŸ 613

On excellence of industry Depends magnanimous bounty.

- Thirukkural 613

8.1 LARgE INDUSTRIES

IntroductionThe main purpose of industry is to

create wealth and employment. Industry is an end in itself as it contributes considerable income to Gross State Domestic Product and revenue to Government exchequer. It generates productive and gainful employment for lakhs of people and earns substantial foreign exchange. This sector has its linkages with agriculture and service sectors. It also provides an assured market for agricultural produce; fuels the process of urbanization; gives rise to sustained demand for integrated transport system, power, road, railways, communication, aviation and other economic infrastructure; and gives impetus to social infrastructure consisting of education, health, water supply and housing. Robust and buoyant growth of the industrial sector is imperative. In the context of globalization and integration of the world economies, growth of industrial output has to increase at a faster rate without getting negatively influenced by global recession and financial meltdown. In view of climate change, healthy reconciliation between industrial growth and environmental conservation is a prerequisite.

In India, the industrial and agricultural sector combined together accounted for about 41.6 percent of our Gross Domestic Product in 2011-12. Though the main occupation has been agriculture for the bulk of the population, India is moving towards rapid industrialization with diversified sectors like the Iron and Steel industries, knowledge-based industries such as Information Technology (IT), Information Technology Enabled Services (ITES), Business Process Outsourcing, biotechnology, food and beverage and tourism industries. The number of industries in India has increased manifold of time.

In terms of industrial development, Tamil Nadu is a well-developed State and has carved a place of pride for itself in the industrial map of India. It has a diversified industrial base ranging from automobiles, textiles, leather, petro-chemicals and information technology. The State’s business-friendly policies and pro-active initiatives have played a key role in this resurgence. In the post- liberalization era, the State has emerged as one of the fore-runners in attracting a large amount of domestic and foreign investments in all critical areas.

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Twelfth Five Year Plan Tamil Nadu

Vision Tamil Nadu 2023 document sets the plan for infrastructure development for the State and the strategies to develop the required facilities, by which the State will be amongst India’s most economically prosperous States by 2023, which would provide universal access to basic services, an investment climate that compares with the best in Asia and the evolution as India’s foremost knowledge and innovation hub. The accent on infrastructure in Vision 2023 is necessitated on two counts – (a) Infrastructure development is investment intensive and in its own right generates significant employment opportunities and economic growth; (b) Infrastructure development creates huge positive externalities in the economy by providing a fillip to economic and social development across all sectors.

Vision 2023 envisages Tamil Nadu becoming the most attractive investment destination in India and among the top three in Asia. To achieve the goal, more investments from leading Indian industrial groups and multinational companies present in other States will be encouraged to set up their second or third base in Tamil Nadu. Also, sunrise sectors such as bio-technology, nano-technology, solar and clean energy based industries will be encouraged.

Insufficient infrastructure is one of the reasons for slow development which is sufficiently addressed by Vision 2023. An investment of `1,50,000 crore is made for industrial infrastructure including land development for industrial use as shown in Table 8.1.1.

New Industrial Policy and Sectoral Specific Policies

A new Industrial Policy will be unveiled to facilitate the realization of Vision 2023 and will focus on growth with employment generation. The new policy will also ensure that the manufacturing sector is linked to agriculture and allied sectors to ensure maximum value addition and to absorb the

surplus workforce. Amongst several proactive measures, Government has initiated formulating other policies viz., Land Policy for industrial purposes and sector specific policies for Automobiles & Auto components, Aero Space, Bio-technology, Pharmaceuticals and Nano-technology which are on the anvil. These policies will also include resolutions for addressing the infrastructural gaps, skilled manpower availability etc., so as to make the industrial sector vibrant for achieving better growth.

Box 8.1.1: Vision Tamil Nadu 2023 – Signature Projects

• Develop world class Centres of Excellence in at least 10 areas that act as nuclei of innovation

• Set up two medical cities in southern and western Tamil Nadu

• Double water storage capacity across the state

• High speed broadband connectivity to be reached to every village

• Two supercritical and other power projects of cumulative 20000 MW capacities

• Gas grid connecting ten large cities• 2000 km of 6/8 lane highways• High speed rail connecting Chennai -

Coimbatore –Madurai - Kanniyakumari• Development of industrial corridors

between Chennai - Hosur, Chennai – Tiruchirapalli, Coimbatore –Madurai, Coimbatore - Salem and Madurai – Thoothukudi

• Three greenfield ports and 5 minor ports with total cargo handling capacity of 150 million tonnes per annum

• Greenfield airport near Chennai with an annual capacity of at least 40 million passengers.

Source: Vision Tamil Nadu 2023, GoTN

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Table 8.1.1: Vision Tamil Nadu 2023 - Industrial Infrastructure Investments (` crore)

S.No. Project Estimated Investment

1 Sriperumbudur area development 5000

2 Madurai – Thoothukudi Industrial Corridor 25000

3 Chennai – Ranipet Corridor 17000

4 Ranipet – Hosur Corridor 30000

5 Coimbatore – Salem Corridor 10000

6 Chennai – Trichy Corridor 20000

7 Coimbatore – Madurai Corridor 10000

8 Establishment of a Petroleum, Chemical and Petrochemical Investment Region (PCPIR) 8000

9 Establishment of an Information Technology Investment Region (ITIR) 10000

10 Establishment of three large industrial townships 10000

11 Aerospace and logistics park near the green field airport 5000

Total 150000

Source: Vision Tamil Nadu 2023,GoTN

Fig.8.1.1: Industrial and Commercial Infrastructure - Vision 2023

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Industrial Scenario

Gross State Domestic Product

Tamil Nadu is ranked the fourth largest State in terms of its economic size. Vision Tamil Nadu 2023 envisages accelerating growth in terms of overall GSDP and per capita income. Hence, it is imperative that all the three sectors viz., primary, secondary and tertiary need to grow at higher rates so as to achieve the target of overall GSDP at an Annual Average Growth rate of 10.9 percent. The growth of the manufacturing sector will be a driving force in achieving the target of overall GSDP of 10.9 percent growth; the thrust is to increase the share of the manufacturing sector from 17 percent to 22 percent over the next 11 years by an Annual Average Growth rate of 13.8 percent for the manufacturing sector and 9.5 percent for the non-manufacturing sector.

The Gross State Domestic Product (GSDP) of the State at constant (2004-05) prices was at `287530 crore in 2006-07 increased to `416549 crore in 2011-2012 (Advanced Estimates) registering an annual average growth of 7.7 per cent. The industrial sector contributed 30.68 percent to Tamil Nadu Gross State Domestic Product (GSDP) posting an Annual Average Growth rate of 7.6 per cent during the Eleventh Plan. Low growth in the industrial sector prevailed due to the global recessionary trend and financial meltdown in the first 2 years of the Eleventh Plan period. During 2009-10, the registered manufacturing sector and electricity, gas and water supply had facilitated the growth of industry sector at the rate of 20.9 percent. During 2011-12, the industry sector slowed down to 6.12 percent when compared to 20.9 percent in 2009-10 and 9.16 percent in 2010-11.The growth of GSDP is shown in graph 8.1.1.

Graph 8.1.1: Growth of Gross State Domestic Product for Industrial sector in Tamil Nadu (at 2004-05 Prices) ( ` crore)

Source: Dept. of Economics & Statistics, GoTN

Tamil Nadu has a broad-based manufacturing sector. Compared to other sectors, manufacturing sector has higher productivity. In the State economy, the share of the secondary sector is 30.24 percent, of which share of manufacturing sector is 20.74 percent. The growth of the manufacturing sector will be a major force as it creates a large number of jobs and also a key to the

growth of the Services sector. Increasing the share of the manufacturing output in this manner calls for specific policy interventions that would channelize investments to the manufacturing sector and enable its footprint to grow proportionately.

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The State produces a range of manufacturing products like automobiles & components, electronic hardware, castings & forgings, pumps & motors, garments & textile products, leather products and chemicals & plastics. A number of investors including Fortune 500 companies are likely to establish their manufacturing base in Tamil Nadu. The share of Tamil Nadu as a percentage of the national production in the major industries is shown in Table 8.1.2

S.No. Sectors Share (%)1 Automobiles &

Components30 – 35

2 Textiles 20 – 25

3 Leather products 35 – 40

4 Electronic Hardware

20 – 25

5 Software & IT Enabled Services

15

Source: Policy Note 2012-13, Industries Dept, GoTN

Table 8.1.2: Sectoral Contribution - Tamil Nadu as a percentage of the

National production

Index of Industrial Production

Industrial growth, as measured by the Index of Industrial Production (IIP) registered an increase of 4 percent in 2011-12 in the State as compared to 2.8 percent over the previous year. During 2008-09, all the sub-groups had not performed uniformly well due to slow down in the growth of economy, and the fallout of the global financial market. Hence, all the three sectors viz., mining (-0.1 percent), manufacturing (-1.5 percent) and electricity (-2.9 percent) sectors had shown a negative growth. During 2009-10, except mining sub-group, manufacturing and electricity sub-groups manifested a positive growth. The manufacturing posted a phenomenal growth of 10.4 per cent in 2010-11 and a minor increase in 2011-12. Thus, in general, the industrial growth exhibited a positive growth of 4 percent at the end of the Eleventh Five Year Plan.

The short run nature of IIP reveals that the deceleration and dip are more in the nature of road bumps than indication of any long run problems. The growth is domestic-demand-driven one. The growth rate from 2007-08 to 2011-12 is depicted in Table 8.1.3.

At present companies like Danfoss, TVS, Nokia Hyundai, ADD Industrial Park, Sanmina-SCI, Indo Rama Group , BGR Energy group, Harsha Group, Saint Gobain Glass, Tube Investments and Amway India Enterprise have proposed to make large investment in the new/ expansion projects. Apart from these, many other companies are at an advanced stage of finalizing their investment plans.

Fig.8.1.2: Truck Manufacturing Unit

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Table 8.1.3: Index of Industrial Production of Tamil Nadu – Growth Rate

Base Year: 2004-05

S.No. Sectors 2007- 08 2008- 09 2009-10 2010-11 2011-12

1 Mining 7.9 -0.1 -2.3 2.9 5.1

2 Manufacturing 2.3 -1.5 9.1 10.4 4.0

3 Electricity 4.9 -2.9 1.1 -4.0 3.8

4 General 2.8 -1.6 7.7 8.6 4.0

Source: Dept. of Economics & Statistics, GoTN

Industrial Characteristics

Tamil Nadu has been one of the India’s most progressive States and is well ahead in terms of Principal industrial characteristics. As per the Annual Survey of Industries 2010-11, Tamil Nadu tops in terms of employment,

The gross output of the State increased to `472318.72 crore in 2010-11 from `257001.44 crore in 2006-07. It stands third in industrial output, next to Maharashtra and Gujarat. It accounted for 10.1 percent of India’s industrial output and contributed a considerable share to the country’s industrial production. All other factors like fixed capital, productive capital, invested capital and net value added have also recorded a higher order of growth. Having recorded an impressive industrial growth during the post-

followed by Maharashtra and Gujarat. It is the leading State in terms of number of factories, followed by Maharashtra and Andhra Pradesh. The comparison of the important characteristics of the Annual Survey of Industries from 2005-06 to 2010-11 of Tamil Nadu is shown below in Table 8.1.4.

Table 8.1.4: Annual Survey of Industries – Tamil Nadu (` crore)

S.No. Characteristics 2006-07 2007-08 2008-09 2009-10 2010-11*

1 Factories (Nos.) 23691 21042 26122 26790 36848

2 Fixed Capital 75068.12 79336.59 97787.62 132889.98 148083.85

3 Productive Capital 104439.28 100926.22 106772.43 160020.06 213748.57

4 Invested Capital 115435.90 129523.11 146992.77 197518.65 232703.305 Total Persons

engaged ( Nos.)1899953 1549761 1774019 1890335 16013.39

6 Gross Output 257001.44 265438.07 300801.95 375810.06 472318.72

7 Net Value Added 37784.25 39341.22 39713.50 59154.59 72039.07Source: Central Statistical Organisation, GoI* Provisional

reform span, it is poised for further industrial development and expansion.

Investments in Industrial Sector

Investment is a productive muscle of economy and provides employment to the growing workforce. Hence, it is imperative that Tamil Nadu is in the forefront of attracting industrial investments. During the period between 2001 and 2006, Tamil Nadu became the most favoured investment destination, as

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we had arduously built up the competitive strengths of the State. With a manageable infrastructure facilities and a vast talent pool, coupled with prudent fiscal management, Tamil Nadu was the top-notch winner. According to the Centre for Monitoring Indian Economy (CMIE), during the period between September 2001 up to March 2004, Tamil Nadu remained the “numero uno” State, in attracting investments in the Manufacturing Sector. However, this momentum slowed in subsequent years.

According to CMIE on-line report titled “Capex”, total investments in pipeline in Tamil Nadu have shot up to `9,25,285 crore in June 2012 as against `7,50,579 crore at the end of March 2011. This implies that Tamil Nadu has attracted an incremental investment of `1,74,706 crore during the last 15 months. From past trends, it may be observed that this marks a quantum jump in investment flows into Tamil Nadu. This includes substantial amount of investments in infrastructure projects like power generation and distribution, roads improvement, water supply augmentation, port development, health care, education, etc. All these will substantially improve the quality and reliability of our infrastructure and strengthen our competitive advantages in attracting investments in to manufacturing sector.

Foreign Direct Investments (FDI)

Foreign Direct Investments (FDI) creates multiple benefits by way of technology transfers, employment generation and upgradation of technology and labour skills, environment and export competitiveness. The total FDI for the State stood at ̀ 45,462 crore from April 2000 to November 2012 which accounted for 5 percent of the national FDI. As per the “SIA Newsletter” published by Department of Industrial Policy and Promotion (DIPP) of Ministry of Commerce and Industry, Government of India, Tamil Nadu ranks fourth at the national level. It bears ample evidence to the fact that Tamil Nadu is rich green pasture for foreign investors. As the State is a major recipient of investment through its investor-friendly and transparent decision-making policies, the State aims to become one of the top three preferred investment destinations in Asia and also the most attractive State for investment in the country.

Major Industries

Automotive Industry

Automotive industry has undergone drastic transformation with a range of new players across the segments- passenger

Fig.8.1.3: Mitsubushi Plant near Chennai Fig.8.1.4. Daimler Truck Manufacturing Plant near Chennai

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cars, commercial vehicles and two wheelers. India’s passenger car and commercial vehicle manufacturing industry is the seventh largest in the world. Chennai in Tamil Nadu is the largest auto cluster in India. Tamil Nadu accounts for 35percent of the India’s Auto components production and has the best eco-system for automobile manufacturing. In the domain of passenger cars, auto majors Suzuki, Daewoo, Peugeot, Fiat-Uno, General Motors, Mercedes and Ford have setup projects. The majority of India’s car manufacturing industry is based around three clusters in the south, west and north. The southern cluster near Chennai is the biggest with 35percent of the revenue share. Auto majors viz., Ford, Hyundai, BMW, Daimler, Renault-Nissan, HM-Mitsubishi, Ashok Leyland, Yamaha, Eicher Motors, etc., have substantial presence in Tamil Nadu.

Apart from these companies, off-road heavy earthmoving equipment manufacturers namely Caterpillar and Komatsu have established their manufacturing bases in the State. At present, Chennai has an installed capacity to make 1.4 million cars and 361,000 commercial vehicles per year.

In addition to the above, automobile tyre manufacturers namely Michelin tyres, JK tyres, MRF, ATC and Apollo tyres have set up plants in Tamil Nadu. Chennai accounts for 60percent of the country’s automotive exports.

Textile Industry

The Textile Industry in Tamil Nadu is the forerunner of industrial development and provides massive employment in the State. Spinning industry has gained momentum in the State and more emphasis for its advancement is witnessed in the recent years. The Textile Mills has been dominating the industrial sector in the State. Out of 3293 large, medium and small textile mills in India, 1997 are located in Tamil Nadu. There are 48.24 million spindles in India, of which, 22.24 million spindles are in Tamil Nadu (46.10percent of India’s capacity). There are about 4000 hosiery units and garment units in this State. Tamil Nadu is a major player in the garment exports business. Tiruppur accounts for a significant share in Indian exports of readymade garments. According to FIEO, during 2010-11, export of Textiles and Garments from Tamil Nadu was accounted for `27117 crore. These units are providing employment to around 5 lakh persons.

Fig.8.1.6: Readymade Garment Unit

Fig.8.1.5: Automotive Industry

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Sugar

Tamil Nadu is one of the major producers of sugar in the country and its contribution is about 8 percent of the country’s total production. The sugar production in 2011-12 was 13.01 lakh tonnes. Sugar industry generates direct and indirect employment to lakhs of rural population engaged in cultivation, harvesting, transport and allied services. There are 46 sugar mills in Tamil Nadu, of which, 16 sugar mills are in the cooperative sector, 3 in the public sector and 27 in private sector. At present 44 sugar mills are functioning i.e., 16 co-operative sugar mills, 2 public sector sugar mills and 26 private sector mills.

In the co-operative sector, 3 co-generation plants are functioning with a total installed capacity of 12.50 MW at 3 sugar mills. Cogeneration projects are proposed in 10 cooperative and 2 public sector sugar mills through TNEB for an additional capacity generation of 183 MW at an estimated cost of `1241 crore. Along with the co-generation programme, 12 sugar mills will be modernized on energy efficiency parameters of the sugar manufacturing process.

Cement

Tamil Nadu is the 3rd largest producer of cement in the country next to Andhra Pradesh and Rajasthan with an annual installed capacity of 32.27 million tones (MT). Two cement plants are owned by Tamil Nadu Cements Corporation Limited (TANCEM), a State Public Sector Enterprise (PSE) at Alangulam with an installed capacity of 2 lakh tonnes per annum and Ariyalur 5 lakh tonnes per annum. The Asbestos Cement plant with a capacity of 28,800 MT per annum at Alangulam and the Stoneware Pipe Unit with a capacity of 5,400 MT per annum at Vridhachalam are the other plants of TANCEM. It is proposed to modernize the Alangulam cement plant and increase the capacity to 4 lakh tonnes per annum and capacity of Ariyalur cement plant to 15 lakh tonnes per annum.

Chemicals, Petro-Chemicals, Fertilisers and Pharmaceuticals

Chemicals, Fertilisers and Petro-Chemicals industry in Tamil Nadu are mainly located in Manali (situated on the outskirts of Chennai) Cuddalore, Panangudi (Nagapattinam) and Tuticorin. Chennai Petroleum Corporation Ltd (CPCL) has a refinery of 9.5 million metric tonnes per annum (MTPA) capacity in Manali and one million MTPA capacity in Panangudi near Nagapattinam. Madras Fertilizers Ltd (MFL) in Manali has a rated capacity to produce 346500 MTPA of Ammonia, 486750 MTPA of Urea and 840000 MTPA of Nitrogen, Phosphate and Potassium (NPK). Tamil Nadu Petro product Limited (TPL), a joint venture with TIDCO has an installed capacity to manufacture 50,000 MTA Linear Alkyl Benzene (LAB) project. Its products are used as raw materials in industries involved in the manufacture of detergents and cleaning agents, lubricants, epoxy resins, pharmaceuticals and textiles. Besides, a number of pertochemical and chemical manufacturing units like Cetex Petrochemicals, Kothari Chemicals, ICI, Balmer & Lawrie, etc have established their manufacturing facilities in Manali near Chennai.

Tamil Nadu is the fifth-largest pharmaceutical manufacturing State in the country, next to Maharashtra, Gujarat, West Bengal and Andhra Pradesh. In pharmaceuticals, Tamil Nadu has become an ideal location for contract manufacturing, global sourcing base, process engineering for products entering for patents and manufacture of generic and other bulk drugs. Orchid Pharmaceuticals, Dadha Pharma, Malladi, Citadel are some of the major companies which have set up units in the State.

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Food Processing and Floriculture

In Tamil Nadu, food processing and floriculture have been identified as thrust sectors. The State is very rich in herbs, fruits, vegetables and spices and is a major exporter of these products to Europe, East Asia and U.S.A. The Government has also established a Bio-tech park in Chennai. There is an abundant availability of highly skilled manpower from eminent institutions in Tamil Nadu in this sector.

State Public Sector Undertakings

Tamil Nadu Industrial Development Corporation Limited (TIDCO)

Tamil Nadu Industrial Development Corporation Limited (TIDCO) was established as Government of Tamil Nadu Enterprise to stimulate industrial development and leverage capital investment through joint ventures. TIDCO facilitates investment in large industrial and infrastructure projects in Tamil Nadu. It adapts itself to the changing business environment and pursues several initiatives that accelerate the growth of the local economy and the society in collaboration with the private sector. It promotes Special Economic Zones (SEZ) and Agriculture

Export Zones (AEZ) through joint ventures. Titan Industries, Tamil Nadu Petro Products, TIDEL Park, Mahindra World City, Ascendas IT Park, IT Expressway, Chennai Trade Centre, etc., are some of the industrial and infrastructure initiatives by TIDCO.

Recently, Minor Port cum Shipyard at Kattupali adjacent to Ennore Port, has been completed at a cost of `3375 crore in partnership with M/S. Larsen & Toubro Limited. The port could handle big cargo ships, vessels carrying LNG and Petroleum fuel and also has fabricated facilities for shipbuilding. This could be used by the traders as an alternative to Ennore and Chennai ports.

The Near Term Projects are as follows:

• Special Economic Zone for IT-ITES with an Integrated International Convention Center at a cost of `3,000 crore in partnership with the consortium led by M/S.Tata Realty and infrastructure Ltd., at Taramani in Chennai.

• A 6 million sq. feet lab space creation for R & D in Bio-tech and Pharma sector is being created at TICEL Bio Park-II with investment of `150 crore at Taramani.

• Multi- Product SEZ at Nanguneri

• Agricultural Export Zone for cashewnuts in Cuddalore

Tamil Nadu Industrial Guidance and Export Promotion Bureau

The Government of Tamil Nadu had constituted Tamil Nadu Industrial Guidance and Export Promotion Bureau (Guidance Bureau) in 1992 with the mandate to attract major industrial projects to the State and to provide single window facilitation. Since

Fig.8.1.7: Mahindra World City in Chennai

Fig.8.1.8: Shipyard Cum Minor Port Complex at Kattupali

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inception, the Guidance Bureau successfully attracted and handled about 240 new industrial projects with an investment of over `92000 crore. Some of the projects successfully handled by Guidance Bureau include: Ford, Hyundai, Nokia, Nissan, BMW, Daimler, Toshiba, Michelin Tyres, Renault, DELL, Samsung, Motorola, Yamaha, Danfoss, etc. It is currently facilitating establishment of an Integrated Industrial township at Old Mahabalipuram Road near Chennai with Ascendas, Singapore over 1500 acres.

State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT)

State Industries Promotion Corporation of Tamil Nadu Limited promotes industries to make Tamil Nadu the hub for global manufacturing. It concentrates on development of new industrial complexes/ parks / growth centres with special infrastructure facilities. SIPCOT has so far developed 19 industrial complexes and established Special Economic Zones. In order to attract foreign direct investment and promote exports, sector specific SEZs have been promoted in its complexes/ parks/ growth centres as listed below:

• Hi-Tech SEZ in Sriperumbudur(570.92 acres)

• Hi-Tech SEZ in Oragadam (347.66 acres)

• Engineering Sector SEZ in Perundurai (263.19 acres)

• Transport Engineering Sector SEZ in Gangaikondan (255 acres)

• Footwear and Leather Product SEZ in Irungattukottai (153.68 acres)

• Sector Specific SEZ for Engineering in Ranipet (260.00 acres)

• Granite Industries SEZ in Bargur (379.96 acres)

• Apparel Park at Irungattukottai (123.83 acres)

Many industrial giants like DELL India, Motorola, Sanmina, Samsung Electronics, etc, have established their facilities in these SEZs with huge investment. As industrialization fundamentally involves acquisition of land, it is in the process of

Fig.8.1.9: Hi-Tech SEZ in Oragadam

Box 8.1.2: Creation of Land Bank

In order to keep adequate lands available with SIPCOT to facilitate for its immediate allotment to the investors, the SIPCOT is in the process of creating a land Bank to promote industrialization in backward regions.

• Thoothukudi Industrial Complex Phase-II –1,022 acres of land

• Cheyyar Industrial Complex Expansion - 2,300 acres

• Sriperumbudur Industrial Park Expansion (Vallam-Vadagal) - 1,780 acres

• Oragadam Industrial Growth Centre Expansion-II - 616 acres

• Madurai Industrial Park - 1,478 acres

• Tindivanam Industrial Park - 720 acres

Currently, SIPCOT is in the process of creating a Land Bank with acquisition of about 16,400 acres in 13 different locations covering six Districts.

Source: Working Group Report, Industries Department, GoTN

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acquiring lands for setting up of the industrial complexes/ parks.

Tamil Nadu Industrial Investment Corporation (TIIC)

Tamil Nadu Industrial Investment Corporation Limited has been assisting the entrepreneurs to develop new industrial units by way of term loan for purchase of land, plant and machinery. It is also assisting for expansion, modernisation and diversification of the existing units. It provides assistance to Micro, Small and Medium Enterprises (MSME) and large industries in which 90% is earmarked for MSME sector. For the benefit of first generation entrepreneurs to set up new units, it has launched a scheme called Micro, Small Enterprises Funding Scheme subject to an overall project outlay of `50 lakh. TIIC has been identified as the nodal agency to release all subsidies viz., capital, mega subsidy, back-ended interest, credit linked capital, etc., to industrial units. It is also providing training to the interested entrepreneurs through EDI, Government of Tamil Nadu by conducting Entrepreneur Development Programme to support the development of entrepreneurs in the State.

Tamil Nadu Newsprint and Papers Limited (TNPL)

Tamil Nadu Newsprint and Papers Limited has emerged as the leader in India’s paper industry with the credential of being the world’s biggest bagasse based paper mill using bagasse as the primary raw material for producing paper required for newsprint and writing and is the largest paper mill in the country in a single location. It has been consistently achieving higher production and higher capacity utilisation. It has increased the capacity in stages to 4,00,000 tonnes per annum in the year 2011. It has already undertaken a major expansion scheme.

It is also under the process of setting up a mini cement plant by converting the mill generated waste materials, slime sludge and

fly ash into high grade cement, installation of Delinked Pulp Plant, revamping of Steam and Power System, etc. The new initiatives are:

• Setting up a Tissue Paper Plant of 100 TPD at a capital outlay of `200 crore.

• Developing a pulpwood plantation in about 1000 acres in the effluent water affected lands on the Noyyal river banks in Tiruppur, Erode and Karur districts.

Mining and Metallurgical Industries

Mineral Resources of Tamil Nadu

Minerals are valuable, finite and non-renewable resources and basic raw materials for industries in modern days and hence the mineral wealth of a nation becomes the backbone of its economic growth. Tamil

Nadu is endowed with industrial minerals like lignite, limestone, magnesite, feldspar, quartz, iron ore, molybdenite, graphite, rare earths, vermiculite, crude oil and natural gas, granite, etc.

Box 8.1.3: Mineral Exploration

Geological Survey of India (GSI) has found two significant platinum prospects in Tamil Nadu viz., Sittampundi of Namakkal district (covering Karungalpatti, Chettiyampalaiyam and Tasamapalaiyam blocks) and Mettupalayam of Coimbatore (Solavanur, Mallanayakkampalaiyam and Karappadi blocks). The GSI was engaged in the exploratory work for the last three years. As of now, exploration has been carried out upto 30 metres. If explored further, scientists of the GSI are of the view that “the potential will be even greater, both in quantity and quality,” By associating with the GSI, Tamil Nadu Minerals Ltd., would be able to diversify its activities. At present, the organisation is focusing on granites. Under the existing constitutional framework, mineral wealth belong to States and it could receive royalties.

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Mineral exploration is necessary to identify the remote areas of occurrence of valuable minerals and to adopt state-of-art technology for optimum use of the minerals. The State aims at mineral explorations and locating of mineral deposits in the State which resulted in setting up of several industries like cement plants, refractory, glass and ceramic industries. The exploration wing is carrying out investigation for molybdenum, gold, silver, platinum group of elements, cobalt, nickel, etc., in Salem and Namakkal districts.

Mineral administration includes the grant of mineral concessions for both the major and minor minerals in accordance with the relevant provisions of the Act and Rules. The State ensures scientific mining without affecting environment, regulation of mining operation for the conservation and development of minerals, prevention of illicit mining and transportation of minerals, collection of signage fee, royalty and thereby enhancing the revenue prospects of the State.

Geotechnical Studies in the Hill Areas of Nilgris and Kodaikanal

The geo-technical cell has studied the hill tracts of the Nilgiris district and Palani hill ranges in Dindigul district, prepared thematic maps and zonation maps etc., deciphering the vulnerable points of landslide and also guide the landslide disaster management. The studies are carried out to mitigate the natural disasters such as landslides/ slips and monitoring the land slides. It provides technical guidance in the landslide disaster management.

Tamil Nadu Minerals Limited(TAMIN)

The main objective of TAMIN is to exploit, process and market granite raw blocks, granite products, major minerals and mineral based products. It is excavating black, white paradise and multicolor granites, major minerals like limestone, graphite, silica

sand, vermiculite, quartz, etc.

Graphite Reserves

The Sivaganga graphite is of flaky variety with 14percent average Fixed Carbon used in the manufacture of refractory bricks, expanded graphite, crucibles and carbon brushes. TAMIN has a large area of graphite bearing land in Pudupatti, Kumaripatti and Senthiudayanathapuram of Sivaganga taluk, Sivagangai district, Tamil Nadu. It is proposed to modernize the factory at Sivaganga to increase its production capacity. Based on the local and export demand, it is proposed to add an additional processing unit in the same place.

Granite

TAMIN has two sophisticated granite processing units viz., one at Manali near Chennai producing building slabs and monuments and the other at Madhepalli near Krishnagiri. TAMIN granite factory caters to the need of domestic and international market. Machinery like gang saws, circular saws, automatic grinding and polishing machinery, imported from Germany are used for producing granite slabs and monuments. Apart from this, TAMIN is also making kitchen top, table top, teapoys, telephone stand etc. for sale in local market at attractive prices. It is proposed to modernize the existing plant at Manali.

Fig.8.1.10: Granite Unit at Manali

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Manufactured Sand

In order to supplement and to control depletion of natural river sand resources, it is proposed to set up an industrial sand unit in four different parts of the State under PPP mode, to manufacture sand and supply for the construction industry in the State.

Tamil Nadu Magnesite Ltd (TANMAG)

Magnesite is a precious ore available in limited places of India and in Tamil Nadu, maximum deposits of this ore is available in Salem districts. It is an essential raw material for manufacturing refractory material used in Steel and Chemical industries. The raw magnesite produced in mines is used for

producing Dead Burnt Magnesite at Rotary Kiln Division and Lightly Calcined Magnesite and Shaft Kiln Division of TANMAG. The total production capacity of Rotary Kiln Division and Shaft Kiln Division is 30,000 MT and 1,70,000 MT per annum respectively.

Eleventh Plan Outlay and Expenditure

An outlay of `414.63 crore was provided for Large Industries during the Eleventh Plan inclusive of State Capital Subsidy of Mega Industries `100 crore, Generator Subsidy of `4 crore, Investments in TIDCO Projects `100 crore, and Formation of New Projects under UNIDO `10 crore. Against this outlay, the expenditure for the Large Industries during the Eleventh Plan

stood at `326 crore. An outlay of `3.23 crore was earmarked for the Eleventh Five Year Plan for Mining and Metallurgical Industries and the expenditure incurred during that period was `2.93 crore.

Twelfth Five Year Plan

Objectives

• Positioning a framework for infrastructure development to achieve sustained industrial sector growth of 10.5 percent.

• Strengthening the manufacturing sector and widening its base especially in the value added skill intensive and high technology sectors.

• Elevating Tamil Nadu as the ‘Automotive Hub of Asia’ with a share of 40 percent of the country’s automotive industry.

• Increasing State’s export to 20 percent of the national exports

• Elimination of regional imbalances of economic opportunities, employment and growth.

• Institutionalization of Human Resources Skill Development by imparting training to the unskilled and semi-skilled work force in key sectors so as to make them employable.

• Generation of 5 million jobs

Strategies

Tamil Nadu’s industrial development strategy for the next five years is envisioned on growth and stability and increased efforts on resource mobilization. Infrastructure and industry will serve as lead sectors. An integrated infrastructure development program will be pursued. An important segment in the key strategy is to guide the infrastructure sector to make the industrial sector emerge as a globally competitive and to improve the industrial infrastructure to accelerate industrialization with efficient and integrated transport networks.

Fig.8.1.11: Magnesite - Shaft Kiln Division, Salem

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Manufacturing sector is the engine of growth which results in the domestic value addition and creating large scale employment opportunities and export promotions. It creates a platform for the people who take up employment in pursuit of higher incomes. Private investments will be induced to flow towards manufacturing possibilities so as to enlarge the economy’s productive base.

Identification of New Industrial Projects

New industrial enterprises during the Twelfth Plan period aim to ensure that the new ventures are bound to generate emergence of growth poles and create positive externalities in industrially potential areas and that there is a distinct dispersal of industrial units to backward regions. The new industrial units are aimed to be capable of generating perceptible backward, forward and financial linkages and new units are to have considerable income and price elasticity of demand. The yardsticks set forth above are intended to avoid severe production bottlenecks, equalizing perfect demand–supply, gains stabilizing the general price increases, reaping economies of scale, efficiency and productivity of gains and locating the niche in the market.

The above mentioned industrial strategy is intended to spur rapid industrialization, generate gainful employment in backward regions, ensure equitable distribution of income and wealth, attain economic inclusiveness in growth process and provide a strong foundation for building-up of economic and social infrastructure.

Tamil Nadu Infrastructure Development Board

Industrial development depends on the spread and quality of the infrastructure available in the State. In this regard, to meet the infrastructure requirements and to attract private investments, “Tamil Nadu

infrastructure Development Board” has been created under the chairmanship of Hon’ble Chief Minister by the enactment of the Tamil Nadu Infrastructure Development Act 2012. The Board will play the role of a nodal agency to coordinate government initiatives in the infrastructure sector. Various incentives such as exemption from payment or deferred payment of any tax/ fees or refund or land in lieu of payment ceases, royalties or other statutory levies will be provided. Industrial corridors, setting up of LNG import terminal and related gas pipeline infrastructure, new minor ports and port industrial corridor are some of the measures to be taken up. All major industrial houses will be encouraged to focus their corporate social responsibility to fill the gaps in government services and also in maintenance of assets created by the government.

Schemes/ Projects proposed for Twelfth Plan

Major investment projects of TIDCO

Tamil Nadu Industrial Development Corporation (TIDCO) promotes large and medium scale industries in Tamil Nadu through new joint venture projects in the manufacturing sector. It facilitates investment in industrial and infrastructure projects in Tamil Nadu. An outlay of `856.93 crore has been proposed as State’s assistance for the Twelfth Plan period. Some of the major projects that are being undertaken are shown in Box 8.1.4. It is also proposed to establish an Integrated Aerospace Park to support the development of aerospace industry covering design, engineering, manufacturing, servicing and maintenance of aircraft in the State. It is proposed to setup a maintenance, repair and operations facility on 50 acres near Chennai Airport and to develop components manufacturing park for aerospace industry on 300 acres in Sriperumbudur.

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Box 8.1.4: Major Projects of TIDCO

• Shipyard cum Minor Port Complex Phase II in Thiruvallur district adjacent to the Ennore port at a cost of `1300 crore in partnership with M/s. Larsen & Toubro limited

• Six million tonnes per annum Petroleum Refinery Project in partnership with Nagarjuna Oil Corporation limited, Cuddalore district at a cost of `9660 crore

• Free Trade Warehousing zone- Logistic Park in Tiruvallur district at a cost of `441 crore

• Multiproduct SEZ at Perambalur in partnership with M/s.GVK group of Hyderabad

• Sector specific SEZ for engineering sector at Krishnagiri district in partnership with GMR infrastructure Limited

• Establishment of Polymer goods manufacturing unit at Ponneri, Thiruvallur district at a cost of `160 crore and 100 factories to manufacture plastic equipment for motor vehicles and engines

• Integrated Financial Services Centre near Chennai to attract both domestic and overseas financial institutions


Fig.8.1.12: Petroleum

Refinery Project at Cuddalore

Fig.8.1.13: Multiproduct SEZ at

Perambalur

Major Projects under SIPCOT

The major development projects to be implemented through SIPCOT are as follows:

• Establishment of three skill development centres at (i) Oragadam industrial growth centre, Kancheepuram district (ii) Gangaikondan industrial growth centre, Tirunelveli district and (iii) Thervoy Kandigai industrial complex, Tiruvallur district.

• Construction of two dormitories one at Sriperumbudur Industrial Park, Kancheepuram district and the other at Neruperichal in Tiruppur district.

• Preparation of Comprehensive Plan for the development of Sriperumbudur area.

• Establishment of a truck terminal in about 10 acres of land at Irungattukottai Industrial Park

• Augmenting water supply to the industrial complexes located at Irungattukottai, Sriperumbudur and Oragadam areas from 5 MGD to 10 MGD.

Environmental Protection

To dispose the hazardous industrial waste by suitably converting the waste, a massive scheme viz., hazardous waste treatment, storage and disposal facility (HWTSDF) has been implemented in an extent of 26.91 acres at Export Promotion Industrial Park, Gummidipoondi by Tamil Nadu Waste Management Limited. Creation of such facility in an extent of 50 acres at SIPCOT Industrial Growth Centre, Perundurai is under study.

Industrialization of southern districts of Tamil Nadu

SIPCOT is keen on developing the industrial complexes all over the state, particularly in the industrially backward southern districts, to maintain balanced regional industrial development. The Corporation has already set up its industrial complexes in some of the southern districts

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viz. Thoothukudi, Tirunelveli (Gangaikondan), Dindigul (Nilakkottai), Pudukottai and Sivagangai (Manamadurai). It is now in the process of developing a new industrial complex (1,478 acres) in Tirumangalam Taluk, Madurai District. Further action is being taken up for setting up of an industrial complex in Therkuveerapandiapuram and Meelavittan villages (remaining extent of 1,022 acres) and Ottapidaram village (1,533 acres), in Thoothukudi district.

The State is in the process of acquiring land for setting up of the industrial complexes/ parks during Twelfth Plan. Land of 16,400 acres has been identified in 13 different locations covering for acquisition in 6 districts viz., Krishnagiri, Kancheepuram, Vellore, Dharmapuri, Thoothukudi and Tiruvallur. Industrial complexes have already been set up in certain districts and it is in the process of developing complexes as listed below:

• Industrial Complex Phase-II - 1179 acres of land in Therkuveerapandiapuram and Meelavittan villages in Ottapidaram & Thoothukudi taluks, Thoothukudi district.

• Cheyyar Industrial Complex Expansion - 2300 acres of land in Kunnavakkam and 9 other villages in Cheyyar taluk, Tiruvannamalai district.

• Sriperumbudur Industrial Park Expansion (Vallam-Vadagal) - 1780 acres of land in Vallam & 2 other villages in Sriperumbudur taluk, Kancheepuram district.

• Oragadam Industrial Growth Centre Expansion-II - 616 acres of land in Vaipur, Mathur & Perinjambakkam villages in Sriperumbudur taluk, Kancheepuram district.

• Madurai Industrial Park - 1478 acres of land in Sivarakottai and 2 other villages in Thirumangalam Taluk, Madurai district.

• Villupuram Industrial Park at Tindivanam - 720 acres of land in Pelakuppam and 2 other villages in Tindivanam Taluk, Villupuram district.

Road Infrastructure

Industrial Corridors are important components of overall infrastructure development, provide domestic connectivity and linkages to global connectivity and are key contributors in triggering economic growth. Such corridors provide balanced development between the arterial and rural roads and address an important concern relating to balance between growth and redistribution.

Many potential sites have been identified to be developed into industrial sites for development of engineering, electronics, IT, logistics, heavy metals, leather, health care products, etc. The Industrial Corridors of Excellence projects planned will be implemented through SIPCOT.

Road connectivity with all the major and minor/captive ports which are licensed to operate on multi user and multi cargo basis will be developed on priority and connectivity infrastructure at the existing/operating port locations upgraded. A focused development in the immediate future will be a Triangular Six Lane Highway Corridor.

Box 8.1.5: Industrial Corridors of Excellence

• Chennai– Ranipet– Hosur– Bengaluru Industrial Corridor which will pass through industrial hubs of Ranipet, Krishnagiri and Hosur.

• Madurai – Thoothukkudi – Tirunelveli – Kanniyakumari corridor which will encompass the ribbon areas adjoining National Highways (NH)-7 (Madurai-Tirunelveli–Kanniyakumari stretch), NH-45 B and NH–7A.

• Coimbatore – Salem Corridor.


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Along these highway corridors, prospective eight manufacturing industry nodes will be located for:

• High technology equipment like telecom, power, ICT and electronics hardware, heavy transport, earth moving and mining equipment

• Food processing , leather and footwear

• Capital goods like machine tools, aerospace industry, renewable energy, solar, wind etc., heavy electronic equipment and defence equipment

Structured Package of Assistance

Structured Package of Assistance to large industrial units is provided through State Industries Promotion Corporation of Tamil Nadu (SIPCOT). Various incentives viz., soft loan on the VAT paid to Government, Investment Promotion Subsidy (refund of VAT paid to Government.), Capital Subsidy, Effluent Treatment Plant (ETP)/ Critical

Infrastructure Subsidy and Training Subsidy are considered. Each package is decided on the merits of each case, depending upon the economic importance, employment potential and level of investment in the State. A sum of `100 crore is earmarked for structured package of assistance to large industrial units during Twelfth Plan Period.

Capital Subsidy to Mega Industries

In order to assist large industries, a sum of `125 crore is proposed capital subsidy during the Twelfth Plan period.

Modernisation of Co-operative Sugar Mills

Sugar mills have to be modernized in order to achieve better recovery and better quality of sugar. Hence, a sum of `50.73 crore is earmarked for modernization and expansion of sugar mills during the Twelfth Plan period.

Mining and Metallurgy

An outlay of `28.86 crore is proposed for strengthening of exploration wing and District Offices, creation of online mining tenement registry through outsourcing and technical wing for online tenement registry, Upgradation of infrastructural facilities, strengthening of exploration wing, formation of mineral check posts at the entry points of Chennai and Tuticorin harbour during the Twelfth Plan.

Other Initiatives

Special Investment Region/ Manufacturing Investment Zone

Special Investment Region / Manufacturing Investment Zone are proposed to be created, focussing on manufacturing sector for identification of sectors in order to create or demarcate at least one large area which will be a Special Investment Region / Manufacturing Investment Zone for each of the sectors listed in Table 8.1.5.

Box 8.1.6: Triangular Six Lane Highway Corridor

• Chennai – Madurai alignment of about 410 km length starting from Chennai city outskirts and traversing eight districts viz., Kanchipuram, Villuppuram, Cuddalore, Perambalur, Tiruchirappalli, Pudukkottai,Sivagangai and Madurai.

• Madurai - Coimbatore alignment of about 200 km length traversing four districts viz., Madurai, Dindigul, Tiruppur and Coimbatore.

• Coimbatore – Chennai alignment of about 420 km length traversing ten districts viz., Coimbatore, Tiruppur, Erode, Namakkal, Salem, Dharmapuri, Krishnagiri, Thiruvannamalai, Vellore and Kanchipuram.


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Table 8.1.5: Special Investment Region/ Manufacturing Investment Zone (` crore)

S.No. Special Investment Region/ Manufacturing Investment

Zone

Location Targeted Investment

1 Petroleum, Chemicals and Petrochemical Sectors

Coastal areas of Cuddalore and Nagapattinam districts.

25000

2 Heavy Engineering sector Tiruvallur district (North of Chennai Metropolitan Area)

15000

3 Automotive sector Chennai Region (Northwestern, Western and Southern Regions) located in Kanchipuram / Tiruvallur districts and Tiruchirapalli district.

10000

4 Textile sector Areas in select Western and Southern districts.

10000

Total 60000

Source: Working Group Report, Industries Dept., GoTN

Master Plans will be prepared with details for providing these demarcated areas with integrated connectivity through external linkages (roads & railway lines), internal roads, marine facilities, exclusive and reliable utilities sources for power and water supply for making these areas as hubs of global standards.

Each of these zones/global hubs will come under separate Development Authorities constituted under existing / new acts for its Governance. Acquisition of lands by Government will be for infrastructure and utilities alone. For others, Government will facilitate land procurement.

In view of the above, a new Heavy Engineering Hub near Ennore is proposed to be promoted to cater to ship-building, boiler & turbine and petrochemical industries along the proposed Northern Port Access Road. The roads along Ennore port would be upgraded and roads connecting the northern port would be laid to facilitate transportation of the goods manufactured at Oragadam. It is also

proposed to set up 3 Industrial Manufacturing Zones with high class infrastructural facilities and a competitive environment to bring about an industrial renaissance in the State. The zones will come up in the first phase at Ottapidaram in Thoothukudi district (1500 acres), Katrambakkam in Vellore district (2000 acres) and Hosur in Krishnagiri district (4000 acres) through a Special Purpose Vehicle.

Terminals to be positioned as a source of Natural Gas in the State

World’s energy demand is expected to double in the year 2030. This will drive up energy costs as resources become scarce over time. Natural gas, has a mature infrastructure in many parts of the world- pipelines, delivery points and storage facilities. Energy is stored in chemical form and it can be physically relocated to meet shifts in demand. It is a versatile fuel source, offering direct heat, power generation and transportation. Also natural gas produces 29 percent less carbon-di-oxide than oil and 44 percent less carbon-di-oxide less than

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coal. Considering the prevailing of future demand situations, price escalations of fuel and environmental issues and uncertainties on gas from Krishna Godavari basin, it is imperative to develop long term projects on natural gas.

• Liquefied Natural Gas (LNG) Import Terminal near Ennore Port and related projects (Marine infrastructure to handle 5 million tonnes per year capacity of LNG, 1000 MW Power Plant & Gas Transmission pipelines) by Tamil Nadu Investment Development Corporation (TIDCO) and Indian Oil Corporation(IOC) Ltd jointly for an investment of ` 10,000 crore.

• LNG Pipeline between Kochi and Bengaluru passing through Coimbatore, Salem, Erode, Tiruppur, Namakkal and Dharmapuri districts to supply gas to nearby industrial units, vehicles and urban households

• Floating Storage and Regasification Unit (FSRU) for LNG imports in Cuddalore/ Nagapattinam districts and building a trunk gas transmission line (Salem to Cuddalore) in association with Gas Authority of India Ltd (GAIL) with an Investment of `4000 crore

• Chennai – Thoothukudi pipeline project approved by the Ministry of Petroleum and Natural Gas in favour of Reliance Industries Limited

• Establishment of a Petroleum, Chemical and Petrochemical Investment Region

(PCPIR) in Cuddalore & Nagapattinam districts

• Petroleum cum petrochemical complex of capacity 15 million tonne per year by TIDCO and Chennai Petroleum Corporation Ltd (CPCL) with an investment of about ` 40,000 crore.

Outlay for Twelfth Five Year Plan

An amount of `1161.52 crore is earmarked as State Outlay for Large Industries sector for Twelfth Five Year Plan as shown in Table 8.1.6.

Fig.8.1.14: LNG Import Terminal near Ennore by TIDCO & IOC

Table 8.1.6: Twelfth Plan Outlay - Large Industries

(` crore)

S.No. Schemes Outlay

1 Major Investments in TIDCO

856.93

2 Structured Package of Assistance

100.00

3 Capital Subsidy to Mega Industries

125.00

4 Modernisation of Co-operative sugar mills

50.73

5 Mining & Metallurgy 28.86

Total 1161.52

Fig.8.1.15: Chennai Petroleum Corporation Ltd., unit in Nagappattinam

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8.2 INfoRMATIoN TEchNoLogy

Introduction

India is a fore-runner in the field of Information Communication Technology (ICT), a sunshine industry and dominating the industrial sector over the past few decades. The IT sector has become one of the key sectors for the Indian economy because of its economic impact. The sector is responsible for creating significant employment opportunities in the economy. Although global uncertainties persist, the Indian IT sector has been able to grow due to its ability to adapt to changing business environment. The contribution of Tamil Nadu towards the Indian Information Technology (IT) Industry has always been considerably high. Tamil Nadu is ahead of other States in India in ICT enabled governance, with the successful implementation of various e-Governance programmes. The State has scientific and social infrastructure and skilled human resources, which are pre requisite for attracting IT investments.

Service Sector in general and Information Technology (IT) and Information Technology Enabled Services (ITES) in particular are the main drivers of growth. The export growth in the IT sector in Tamil Nadu has increased from `20658 crore

during 2006-2007 to `42,100 crore in the year 2010-11 and `48,000 crore during the year 2011-12. In order to attract more investments and promote IT exports, a comprehensive IT industry-friendly ‘Information Communication Technology’ Policy is on the anvil. It will lay emphasis on attracting foreign direct and domestic investments and creation of employment opportunities with the establishment and growth of the ICT sector in Tier II and Tier III locations of Tamil Nadu.

Tamil Nadu is endowed with a huge potential for success in scaling services with human capital due to the academic institutions that creates skilled workforce. It is imperative to develop adequate high-speed bandwidth connectivity and necessary infrastructure essential for improving productivity and competitiveness of back office operations. Vision Tamil Nadu 2023 envisions on positioning Tamil Nadu as a leader in back office operations. The State aspires to become the back-office for several functions such as accounting, design, data storage, digital editing, animation, etc.

Electronic Corporation of Tamil Nadu Limited (ELCOT)

The advent of IT revolution in India has seen the transition of the ELCOT, a Government of Tamil Nadu enterprise created for the promotion of electronic industry and is an Information Technology arm to provide support to various departments in the area of IT, e-Governance, providing internet connectivity and capacity building. ELCOT is the nodal agency for hardware procurement, software development, major turnkey projects of the State and major projects of the Department of Information Technology, GoI. Tamil Nadu State Wide Area network (TNSWAN) and TNSDC has been established by ELCOT.

20658

28246

36680 3676542210

48000

2006-07 2007-08 2008-09 2009-10. 2010-11 2011-12

` crore

Graph 8.2.1: IT Export in Tamil Nadu

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Eleventh Five Year Plan Review

An outlay of `931.95 crore was allocated for Information and Technology sector during Eleventh Five Year Plan which includes a sum of `135 crore for Assistance to ELCOT for the improvement of State Data Centre and Establishment of Tamil Nadu State Wide Area Network (TNSWAN) and an amount of `750 crore for the scheme of free distribution of colour televisions. Against this outlay, an expenditure of `1100 crore was incurred for Information and Technology sector during Eleventh Plan.


Objectives

• Provide government services, both information and transaction, to citizens at their door steps through the internet

• Minimize the interaction of the citizens with Government offices and maximize Government interaction with its citizens

• Bridge the digital rural-urban divide

• Make Tamil Nadu the best in IT enabled governance

• Make Tamil Nadu one of the best destinations for manufacture of electronic hardware equipments

• Substantially increase the software exports of Tamil Nadu

• Take computing in Tamil to a higher level.

• Enhance the quality of life of citizens through Information and Communication Technology

The State has a sizeable share in the country’s IT / ITES exports. The goal is to make Tamil Nadu a leading state in the country in the IT/ITES export sector. The Government of Tamil Nadu has envisioned providing Government services in an efficient and transparent manner at affordable cost. The State shall harness the growth of hardware manufacturing industries by encouraging cluster-based approach along with testing

and certification facilities. Advanced software will be developed in Tamil on par with global standards.

Key Components of Twelfth Five Year Plan

e-Governance

The Tamil Nadu e-Governance Agency (TNeGA) functions to spearhead the e-governance initiatives of the Government departments in the State. It aims to develop State-wide Rollout of e-District Programe, Common Service Centres, Capacity Building (CB), Tamil Nadu Geographical Information System (TNGIS) and State Portal. Realizing the basic needs of the common man, Government would provide all Government Services to his locality through common service delivery outlets like common service centres, internet kiosks, special counters, mobile phones, etc.

e-Governance Policy

Mere automation will not suffice the efficiency of Government processes. Web based interface for citizens with the government for availing routine government services is essential. Hence, a focused public policy with a guided approach to output aimed at e-Governance is necessary to improve productivity levels within Government. An elaborate e-Governance policy is being formulated to provide visible parameters and a clear vision for Governance.

e-District

In Government, the District Administration plays the most critical role in implementation of any scheme that reaches the masses especially the rural population. Therefore, implementing e-Governance at district level is the key to achieve National e-Governance Plan (NeGP) objectives and goals. The e-District project was conceptualized to improve the citizen services and enhance the efficiencies of the various departments at the district-level to enable

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seamless service delivery. The Government of Tamil Nadu implemented e-District Project in 6 pilot districts. The Detailed Project Report (DPR) for the remaining 26 Districts has been submitted to Government of India for statewide rollout of the Project. The success of the e-District programme depends on its networking to the village level. With additional hardware, network infrastructure and internet connectivity to the Village Administrative Officers and Revenue Inspectors thus expanding Communication Gateways. To oversee the implementation of e-District services and other services offered at District Level, the Government have ordered the formation of District e-Governance Societies (DeGS) in all the districts. Under the e-District Project, e-District application services are provided to the citizens by the Backward Classes and Most Backward Classes and Adi Dravidar and Tribal Welfare Department, Social Welfare Department and Revenue Department. An outlay of `112 crore is earmarked for the Twelfth Five Year Plan.

Common Service Centre (CSC)

The scheme envisions CSCs as the front-end delivery points for Government, private and social sector services to rural citizens of India, in an integrated manner. The objective is to develop a platform that can enable Government, private and social sector organizations, to align their social and commercial goals for the benefit of the rural population in the remotest corners of the country through a combination of IT-based as well as non-IT based services.

The CSCs would provide high quality and cost-effective video, voice and data content and services, in the areas of e-governance, social welfare, education, health, telemedicine, entertainment as well as other private services. A highlight of the CSCs is that it will offer web-enabled e-governance services in rural areas, including application forms, certificates, and utility payments such as property tax, electricity, telephone

and water bills. As of now, 1044 CSCs are functioning in PPP model, about 500 service centers are enabled by Primary Agricultural Co-operative Credit Societies (PACCS). Efforts will be made to deliver about 1000 citizen services of Government departments. An outlay of `30 crore is earmarked for the Twelfth Five Year Plan.

State Service Delivery Gateway (SSDG)

SSDG is a standard based framework that ensures message switches and provides seamless interoperability and exchange of data across departments. The citizens will be required to interact with a single front end system called “State Portal” and rest of the backend operations with workflow are taken care by SSDG. The project components are i) State Portal ii) State Service Delivery Gateway and iii) e-Forms. The e-Forms will be hosted on the State portal and could be downloaded by citizens for online submission. Once the e-Form is submitted to the State portal, the e-Form data will be routed by SSDG to the respective department server located in the State Data Centre (SDC), where the information submitted by the citizen will be stored. The National Informatics Centre (NIC) has developed the State portal. The newly designed and developed State portal incorporating e-Forms and SSDG middleware will be launched soon to enable the citizen to access Government services through internet. An outlay of `5 crore is earmarked for the Twelfth Five Year Plan.

Citizen Contact Center (CCC)

Citizen Contact Center with assistance of Government of India will be set up to provide informational and transactional, non-emergency Government to Citizen (G2C) services for various departments as identified under the Mission Mode Projects (MMPs). While other channels of delivery such as departmental counters, websites, and service kiosks serve important functions, Citizen Contact Centers provide

340


the advantage of greater accessibility due to high penetration of telecom and cellular services in rural parts, ease of usage, reduced costs and improved service delivery over these channels. Tamil Nadu is one of the 6 States where the Citizen Contact Center will be established in the first phase. An outlay of `0.60 crore is earmarked for the Twelfth Five Year Plan.

Thrust Areas

Mobile Governance (m-Governance)

The Government of India’s policy on telecom sector opened an opportunity to the rural population to connect through mobile devices that lead to consider the mobile services as one of the service delivery channels for e-Governance. To streamline the e-Governance through mobile devices, the Government of India is in the process of framing Mobile governance or m-Governance policy that defines the overall strategy and processes for delivering various public services through mobile devices. Tamil Nadu being one of the leading States in e-Governance, will be in the forefront in adopting the m-Governance policy which will be introduced and implement applications that will deliver services through mobile phones. An outlay of `2.5 crore is earmarked for the Twelfth Five Year Plan.

Cloud computing

Cloud computing is a new approach to compute the user shared resources to deliver computing solutions. It involves delivering hosted services over the Internet. Cloud computing technology will considerably reduce the spending on hardware of the Government. IT Department will explore the possibility of enhancing e-Services through Cloud computing and set annual targets for migrating hardware capacity to cloud locations for various IT initiatives. An outlay of `7 crore is earmarked for the Twelfth Five Year Plan.

Information and Communications Technology (ICT) Repository

Government departments as of now, implement application software through Government and outsourcing agencies. Considering the timeframe and traceability of documents, it is proposed to maintain a centralized software repository for the Government departments so that the software, source code and documentations could be made available at a single location under the custody of single Government agency. The support and documentation would be available for the future requirements of the department through this repository. An outlay of `0.17 crore is earmarked for the Twelfth Five Year Plan.

e-Procurement System of NIC (GePNIC)

At present, only a few Government organizations are using e-Procurement / e-tendering for their procurement purposes. A blueprint would be laid down to enable Government departments to use e-Procurement/ e-Tendering system in order to bring in transparency, efficiency, reliability and scalability.

Preparation for Internet Protocol Version 6 (IPV6) Migration

The current version of the Internet Protocol is IPv4, which is a 25 year old protocol having many limitations. The rapid growth of internet, wireless subscribers and deployment of web based technology is leading to accelerated consumption of IP addresses. Existing IPv4 addresses has become invalid and the Internet Protocol version 6 (IPv6) has been developed by the Internet Engineering Task Force (IETF), which improves the IPv4 thereby practically making available an almost infinite IP addresses. Therefore, worldwide, different countries are implementing the new IPv6 addresses to accommodate increased number of users and also develop applications based on the new features of the protocol. In India also, efforts

341341


began as early as 2004 when “Migration from IPv4 to IPv6 in India” was listed as one of the items in the Ten Point Agenda given by Ministry of Communications & Information Technology, Government of India. After due deliberations, it was recommended for preparing a suitable roadmap to achieve transition from IPv4 to IPv6, clearly bringing out the steps involved. Number of activities like workshops, seminars and training programmes, will be conducted to interact with different stakeholders like service providers, State Government departments, educational institutions, industry associations, equipment manufacturers and content developers. It is expected that all Government departments/ organizations, service providers and other stakeholders will transit to IPv6 in a time-bound manner. An outlay of `2 crore is earmarked for the Twelfth Five Year Plan.

e-Waste Policy

The Government of Tamil Nadu has introduced a policy on e- waste, with effective legislation and regulations to protect the public interest and to tackle the alarming increase in e-waste generation and the consequent threat of environmental degradation. e-waste Policy is formulated with the objective to minimize e-waste generation, to utilize e-waste for beneficial purposes through environmentally sound recycling and to ensure environmentally sound disposal of residual waste. The Government of Tamil Nadu (GoTN) recognizes that e-waste is a material resource and its management would encompass the short and long term economic, environmental, and social costs and benefits. This Policy sets forth the position of the Government of Tamil Nadu on e-waste management by identifying the roles and responsibilities of all stakeholders including the public to manage the e-waste in an environmentally sound manner in Tamil Nadu, through reduction in the generation of e-waste and providing a system for collection, segregation and recycling of e-waste. The state would encourage and promote

necessary infrastructure for collection, storage, utilization, recycling and disposal of e-waste. Further, it is aimed to promote e-waste recycling as a socially good and viable industry in Tamil Nadu and involve the Small & Medium Enterprises (SMEs) in its activities in the State. The Government of Tamil Nadu, IT department and the Tamil Nadu Pollution Control Board are responsible for formulation and implementation of the policy. Strategic themes and action programmes are envisaged through this policy with the focus on the on-going activities and new initiatives required to achieve the goal.

IT Infrastructure

Tamil Nadu State Wide Area Network (TNSWAN)

IT infrastructure provides the backbone for advanced collaboration and integration of various technology such as Data Centres, Connectivity Grid, Data storage, Storage Grid based resources. TNSWAN has been established with an estimated cost of `181.69 crore (GoI share `97.17 crore and State Share `84.52 crore). The five years Build, Own, Operate and Transfer (BOOT) Model TNSWAN operation has been completed. Horizontal connectivity has been provided to about 1600 offices of departments such as Commercial Taxes, Tamil Nadu Water supply and Drainage Board, Tamil Nadu Health Systems Project (TNHSP), Treasuries and Accounts, Registration, Employment and Training, Forest, Tamil Nadu e-Governance Agency, State Health Society, Tamil Nadu Housing Board, Survey and Settlement, Tamil Nadu Cements Corporation Ltd., (TANCEM), etc. As per the Department of Information Technology, Government of India’s SWAN guidelines, the operational cost of TNSWAN beyond the five years BOOT period has to be borne by the State Government. In view of the technology change and Horizontal connectivity requirement for the faster TNSWAN connectivity, capital expenses need to be incurred on the beginning of the Phase-2 operation. An outlay of `113 crore

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is earmarked for continuing the TNSWAN Phase-II operation for Twelfth Five Year Plan.

Tamil Nadu State Data Centre (TNSDC)

Tamil Nadu State Data Centre (TNSDC) has been established in the State by ELCOT and it is one of the core e-Governance backbone infrastructure under National e-Governance Action Plan (NeGP). It is a shared scheme between the state and the Central Government as per the SDC Guidelines of Department of Information Technology, Government of India, at an estimated cost of `60.80 crore.

TNSDC will facilitate the Government departments in the consolidation of services, applications and infrastructure to provide efficient electronic delivery of Government to Government (G2G), Government to Citizen (G2C) and Government to Business (G2B) services. State Data Centre would provide many functionalities viz., Tamil Nadu State Wide Area Network (TNSWAN), Common Service Centre (CSC) and Internet. TNSDC is a secured and centralized facility which is a data repository for all departments. An outlay of `12.50 crore is earmarked for the Twelfth Five Year Plan.

Disaster Recovery Centre (DRC)

The applications and services of Government departments have been hosted in the State Data Centre (SDC) in a secured environment. In order to avoid loss of data/ applications due to natural/ manmade disasters, establishment of a Disaster Recovery Centre (DRC) has become mandatory. Administrative approval has been issued for the establishment of a Disaster Recovery Centre (DRC) in Tamil Nadu and Electronics Corporation of Tamil Nadu (ELCOT) has been nominated as the implementing agency for the setting up of Disaster Recovery Centre (DRC) in two

phases. An outlay of `60 crore is earmarked for the Twelfth Five Year Plan.

Tamil Nadu Geographical Information Systems (TNGIS)

Geographical Information System (GIS) is a tool for managing, analyzing and decision making, by seamlessly combining both spatial and non-spatial data. Tamil Nadu Government is taking the initiative to set up Tamil Nadu Geographical Information System (TNGIS) centre for implementing standards based on GIS applications, which could be used by Government departments.

Information Technology (IT) Parks

Government IT Parks

The Knowledge Industry Townships (KITS) will be created along the IT highway in Chennai through Public Private Partnership. It is also envisaged to position Coimbatore, Madurai, Trichy, Tirunelveli, Hosur and Salem as Tier II cities for promoting IT investments.

The ELCOT promoted IT Special Economic Zones (SEZ) have been branded as ‘ELCOSEZ’. ELCOT has established ELCOSEZs in eight locations as shown in Table 8.2.1.

Fig.8.2.1: Ascendas IT Park

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Table 8.2.1: ELCOSEZs promoted by ELCOT

(in acres)S.No. Location Extent

1 Chennai 377.08

2 Coimbatore 61.59

3 Tiruchirapalli 147.61

4 Madurai-1 (Ilandhaikulam)

28.91

5 Madurai -2 (Vadapalanji)

245.17

6 Tirunelveli 500.00

7 Salem 164.26 8 Hosur 174.47

Source: Working Group Report, IT Dept, GoTN

The marketing of ELCOT promoted IT SEZ at Tier II Cities of Tamil Nadu has been taken up in aggressive manner. Leading IT Companies have taken up land in ELCOSEZ and likely to start their operations very soon. ELCOSEZ at Chennai, Coimbatore and Tiruchirapalli have started their operations.

The operationalisation of the ELCOSEZ in Tier II cities will create huge employment opportunities and thereby improve the economic condition of the people. Incubation facility and Training Centres exclusively for small and medium IT industries has been created in all ELCOSEZ to facilitate the IT/ITES companies to start their operations. Eligibility criteria have been relaxed for allotment of land for IT/ITES Companies in ELCOSEZ.

Fig.8.2.2: ELCOT IT Park in Chennai

Business Process Outsourcing (BPO) in rural areas

Enhanced Rural BPO Policy

Rural BPO policy is already operational to encourage setting up of BPO facilities in rural areas especially at village panchayat level. An Enhanced Rural BPO policy is under consideration of the Government to attract more companies in setting up BPOs in rural areas. It is proposed to create 25 BPOs in the rural areas. An outlay of `2.50 crore is earmarked for the Twelfth Five Year Plan.

Skill Development

Skill development is imperative for the human capital. Under Skill Development scheme, an amount of ̀ 26 crore is earmarked for the following components proposed to be taken up for the Twelfth Five year Plan.

Training to Rural Students

In order to improve the quality of rural students passing out of institutes and colleges in Tamil Nadu, the Government is taking necessary steps to mould them to be industry-ready. Special training programmes are devised to sharpen the skills of the rural students to face the challenges existing in the IT/ ITES sector.

National Knowledge Network (NKN)

The NKN is a Government of India initiative comprising of an ultra-high speed CORE (multiples of 10 Gbps (gigabyte per second) intranet, connecting academic institutions across India. Participating institutions will connect to the National Knowledge Network seamlessly at speeds of 1 Gbps or higher. The entire network will seamlessly integrate with the global scientific community at multiple gigabits per second speed. This network will be leveraged for skill development of the students in Colleges and Universities in the State. The state will take initiatives of NKN to improve the e-Governance efforts and also encourage all

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educational institutions to be part of this network.

Mission Mode Departments

The concept “Mission Mode Projects” implies that the objective and the scope of the project are clearly defined, the project has measurable outcomes and service-levels and the project has well-defined milestones and timelines for implementation under National e-Governance Plan (NeGP). The Government of Tamil Nadu has identified 14 Mission Mode Departments (MMDs) to implement the Mission Mode Projects.

ICT Academy of Tamil Nadu (ICTACT)

ICT Academy of Tamil Nadu (ICTACT) is an initiative of Government of India, Government of Tamil Nadu and the Confederation of Indian Industry (CII). ICTACT is an autonomous non-profit society established in Public Private Partnership (PPP) mode. The objective of ICTACT is to train teachers and students in the Higher Education of the ICT domain. The training will enable the students to become industry ready for creating a new generation of talent pool in ICT industry. ICTACT is involved in facilitating and monitoring Rural Business Process Outsourcing (BPO) in the State. The existing strength of ICTACT on Industry - Academia- Government collaboration is used to promote the Rural BPOs. This aims at creating employment opportunities for the rural youth in the State.

Capacity Building for Non-Mission Mode Departments (Non-MMDs)

A scheme to enhance the capacity of government employees for the implementation of the e-Governance projects in non-Mission Mode departments will be undertaken. The Government will take steps to build skills and change management in order to make e-Governance sustainable.

Electronic Hardware Manufacturing Industry

With the advent of Information and Communication Technology (ICT), the usage of electronic components has increased manifold. The expenditure on the electronic hardware is growing every day.

At present 61% of the electronic components required for the Indian Industry are imported and only 39% are manufactured indigenously. This trend needs to be reversed.

An Eco-system will be created to kick start electronic system design and manufacturing industry in the State. In order to spur growth

Graph 8.2.2: Indian Electronic

Component Market

Fig.8.2.3: Electronic Hardware Manufacturing Industry

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in hardware development, thrust will be given for setting up Electronic Hardware manufacturing Industry in ELCOSEZ. Special incentive package will be considered for starting Electronic Hardware manufacturing industry. Government is in the process of formulating an exclusive Policy on Electronic Hardware Manufacturing. An outlay of `50 crore is earmarked for the Twelfth Five Year Plan.

Tamil Computing

Taking Tamil computing to Global level

In order to take Tamil computing to new heights, documents and books will

be digitized and made available in the web. Digital dictionaries and Tamil encyclopedia will be developed. To facilitate Tamil computing through mobile phones, tablet software will be developed. Foolproof software like machine translation, optical character recognition will be made available.

Outlay for Twelfth Five Year Plan

A sum of `433.27 crore is earmarked as State outlay for the Twelfth Plan as shown in Table 8.2.2.

Table 8.2.2: Twelfth Plan Outlay - Information Technology

(` crore)


1 Skill development 26.00

2 Encouraging Manufacturing electronic hardware 50.00

3 Cloud computing 7.00

4 M-Governance 2.50

5 State Service Delivery Gateway (SSDG) 5.00

6 Common Service Centre (CSC) Assistance 30.00

7 e-District 112.00

8 Citizen Contact Centres 0.60

9 Information Communication TechnologyCT Repository 0.17

10 Preparation for IPV6 migration 2.00

11 Rural BPO 2.50

12 Disaster Recovery 60.00

13 IT Promotion expenses 10.00

14 TNSWAN 113.00

15 Tamil Nadu State Data Centre 12.50

Total 433.27

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8.3 MIcRo, SMALL AND MEDIUM ENTERPRISES

Introduction

The recent past has seen the emergence of the Micro, Small and Medium Enterprises (MSME) sector as a highly vibrant and dynamic sector of the Indian economy. MSMEs play a crucial role in providing large employment opportunities at comparatively lower capital investment and helps in industrialization of rural and backward areas, thereby, reducing regional imbalances. They are complementary to large industries as ancillary units and contribute enormously to the socio-economic development of the nation. Greater competition, rapid technological advances, more demanding market requirements and constant changes in consumer demands require Small and Medium Enterprises (SME) to be innovative and creative to face the challenges of the global market. Therefore, there is a need to create and promote a conducive business environment for SME development to help them emerge as a viable and high potential business. It will be addressed through combination of policy measures, skill development and infrastructure facilities.

Status of MSME sector

As per the Fourth All India Census of the MSME, this sector employs an estimated 597 lakh persons spread over 261 lakh enterprises, accounting for about 45 percent of the gross value of output in manufacturing sector and 40 percent of total exports of the country. There are 7.6 lakh registered MSMEs in the State, accounting for the largest number of MSMEs in the country (15.07 percent), the second largest number of medium enterprises (12.51 percent) and the third largest number of small enterprises in the country (9.97 percent), with a total investment of about `39,438 crore and providing employment to 52.99 lakh persons at the end of the year 2011-12.

Tamil Nadu has a diversified manufacturing sector and is well known for its traditional industries such as textile, hosiery and leather industries. Besides, it has established itself as a manufacturing hub for automobile and auto components, cement, sugar, pumps, motors and engineering industries. In the post-liberalisation era, the State has witnessed growth of new knowledge-based industries such as Information Technology (IT), Information Technology Enabled Services (ITES) and Biotechnology. The State has emerged as one of the forerunners in attracting the domestic and the foreign investments in all these areas. The emergence of big players in large scale sector has also provided for a multiplier effect in terms of investments in ancillary industries and related services sector in the MSME sector. In the present arena, the MSME sector forms the backbone of the manufacturing sector in Tamil Nadu.

Micro, Small and Medium Enterprises Development (MSMED) Act

In response to the demands of the Small Scale Industrial (SSI) sector, and to provide a legal framework to address the developmental concerns of “Small and Medium Enterprises” (SME), the Government of India in its recent enactment of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 has changed the nomenclature of Small Scale Industries (SSI) sector into SME sector.

The MSMED Act has classified the manufacturing enterprises in terms of investments in plant and machinery (excluding land and building).

• Micro Manufacturing Enterprises – Upto `25 lakh

• Small Manufacturing Enterprises – Above `25 lakh and upto `5 crore

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• Medium Manufacturing Enterprises – Above `5 crore and upto `10 crore

Similarly, Service Enterprises have been classified in terms of their investment in equipment (excluding land and building).

• Micro Service Enterprises – Upto `10 lakh.

• Small Service Enterprises – Above `10 lakh and upto `2 crore.

• Medium Service Enterprises – Above `2 crore and upto `5 crore.

Micro, Small and Medium Industries Policy

Tamil Nadu has been in the forefront, with a proactive policy to stimulate the growth of the MSME sector. Encouraging the development of a sound industrial base without losing focus on the small and medium enterprise sector, has been one of the unique features of our State’s balanced industrial policy.

Micro, Small and Medium Industries Policy, 2008 in Tamil Nadu, focused on all initiatives to be taken up for the development of MSMEs including infrastructure development, incentive schemes, technology development, subsidy schemes for units located in industrially backward areas, skill development, marketing support, deregulation and simplification, administrative reforms and rehabilitation of sick enterprises. These policy measures have laid emphasis on development of local entrepreneurship, women’s employment and technology up-gradation to reap better economies of scale. They have simultaneously promoted quality consciousness and brand equity among the small scale entrepreneurs.

Performance of MSMEs during the Eleventh Plan

An outlay of `206.06 crore was provided for various schemes in Micro, Small and Medium Enterprises sector and an expenditure of `115.42 crore was incurred

during the eleventh plan period. Various schemes such as setting up of infrastructure facilities in industrial estates, technology upgradation and modernization, interest and capital subsidy schemes and providing employment schemes were implemented.The major schemes implemented during that period are as follows:

Capital Subsidy Scheme

On introduction of the MSMI policy (2008), the New Anna Marumalarchi Thittam (NAMT) of 2002 was subsumed in the backward area subsidy scheme announced under MSMI policy. The package of incentives and concessions to MSMEs located in industrially backward areas are:

• Exclusive subsidy schemes for micro manufacturing enterprises established anywhere in the State.

• 100 percent subsidy on the net Value Added Tax (VAT) paid by Micro Manufacturing Enterprises for the first six years up to the value of the investments made in Plant and Machinery.

• Capital Subsidy Schemes for micro, small and medium manufacturing enterprises established in industrially backward areas, industrial estates and agro based industries set up in 385 blocks in the State.

• Special Capital Subsidy for thrust sector industries set up anywhere in the State.

Fig.8.3.1: Capital Subsidy assisted unit, Plastic Tank Manufacture, Tiruppur District

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Unemployed Youth Employment Generation Programme (UYEGP)

This scheme addresses the problems of the socially and economically weaker sections of the society particularly the educated, unemployed youth and helps them become self employed by setting up micro enterprises with an investment of less than `5 lakh, in manufacturing /service/ business activities including a subsidy assistance of 15 percent. The scheme is implemented through the District Industries Centres in the districts and the Regional Joint Director of Industries and Commerce in Chennai. The Commissionerate of Industries and Commerce is the State nodal agency.

Prime Minister’s Employment Generation Programme (PMEGP)

The PMEGP scheme is a credit linked subsidy programme for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. It was formulated by merging two schemes, viz., the Prime

Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP). During the four year period commencing from 2008-2009, the employment generation was 60409 persons in the State.

The targets and achievements during 2008-09 to 2011-12 are given in Table 8.3.1.

Fig.8.3.2: UYEGP Programme - Beauty Parlour

Fig.8.3.3: PMEGP - Arecanut Plates Manufacturing Unit, Tiruppur

Fig.8.3.4: Agro based rural industries under PMEGP

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Objectives

• To enhance the competitiveness and scalability, capacity of the MSME sector in Tamil Nadu

• To encourage agro based industries for increasing value addition and enhancing farmers’ income

• To target a sustained annual growth rate of over 10 percent in MSMEs

• To reduce regional imbalances in the industrial development within the State and to facilitate setting up of MSMEs in backward areas of the State

• To promote 15 lakh direct and indirect employment opportunities during the plan period.

Strategies

• To create environment for nurturing enterprise, improving markets, supporting innovation and providing access to finance

• To revive the micro, small and medium enterprises in the State and enable them

Table 8.3.1: Target and Achievement of PMEGP Scheme

Year Target Achievement Employment GeneratedNos. Margin Money

(` crore)Nos. Margin Money

Released (` crore)

2008-09 1407 16.88 766 10.88 9064

2009-10 2890 20.61 1524 23.36 19455

2010-11 968 13.56 1063 18.18 13147

2011-12 950 13.29 1663 31.23 18743

Source: Working Group Report, MSME Dept., GoTN

to become competitive in a World Trade Organisation (WTO) compliant global market and become world leader in select segments

• To encourage modernization and upgradation of technology in traditional sectors for having competitive edge in the wake of liberalisation and globalisation

• To create employment opportunities particularly to the vulnerable sections of the society and rural people, ensuring inclusive development

• To promote entrepreneur development and sector specific skill development training programs for upgradation of key sectors like automobile and auto parts, IT, ITES, textiles, leather, engineering goods, etc., and newly emerging sectors like bio-technology, nano-technology, pharmaceuticals etc., to match the skill needs in coordination with industry

• To create infrastructure facilities, provide incentives and marketing as well as technical support to the MSMEs

• To cater to the quality testing requirements of industries in general and to MSMEs in particular

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• To reduce procedural formalities to speed up industrialization

Programmes during the Twelfth Five Year Plan

Infrastructure Support

Creation of Common Facility Centres

Under Micro and Small Enterprises Cluster Development Programme (MSE-CDP) scheme, Government of India provides assistance up to 80 percent of the project cost subject to a ceiling of `15 crore per project. Around 20 percent to 25 percent of the cost is to be borne by the Special Purpose Vehicle (SPV). The State Government’s share is up to 10 percent of the project cost subject to a ceiling of `1.00 crore. During Twelfth Plan period, it has been proposed to develop Common Facility Centres for 34 micro and small enterprises clusters in the State with assistance under MSE-CDP Scheme. An outlay of `24.45 crore has been proposed as State Government share for this scheme during Twelfth Plan period. Details are given in Annexure 8.3.1.

It is proposed to start new coir industries for export promotion and value added production under Scheme for Rejuvenating the Traditional Industry (SFRUTI) scheme. The Coir Board has

earmarked nine coir clusters under SFRUTI for Tamil Nadu. Three clusters are proposed to be set up at Pollachi, Dindugul and Kanyakumari. For the remaining 6 clusters, locations have been identified in Tiruppur, Madurai, Tirunelveli, Ramanathapuram, Dharampuri and Krishnagiri districts.

Industrial Estates under MSE-CDP scheme

It has been proposed to create infrastructure facilities in 16 new Industrial Estates by SIDCO under MSE-CDP scheme at a project cost of `140.58 crore with 60 percent of GoI grant of `72.53 crore and the balance 40 percent will be met by SIDCO. Details are given in Annexure 8.3.2. It has also been proposed to upgrade 17 existing SIDCO Industrial Estates under MSE-CDP Scheme at a total project cost of ̀ 48.55 crore with 60 percent grant from GoI of `29.13 crore, 30 percent grant from State of ̀ 14.56 crore and 10 percent beneficiary contribution. Details are given in Annexure 8.3.3.

Revamping of District Industries Centres

The District Industries Centres are proposed to be revamped with better infrastructure, so that these centres can serve as the hub for promoting of MSME units. It would include reconstruction, renovation and modernization of the existing buildings with modern IT-enabled communication facilities in the various district head quarters. Capacity building and training of the human resources would also be an important component. An outlay of `50 crore is proposed for this scheme for the Twelfth Five Year Plan.

Incentive Support

It has been proposed to continue implementation of the incentive schemes announced in the MSMI Policy 2008, during the Twelfth Plan period with a few modifications as mentioned below:Fig.8.3.5: Automatic Dipping Machine -

Safety Match Cluster, Gudiyatham Common Facility Centre

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Capital Subsidy

(i) To increase the coverage of backward blocks

Of the total 251 backward blocks, 173 blocks have been covered including blocks in industrially backward districts for providing capital subsidy. It aims to increase to cover the remaining backward blocks as ‘Most backward blocks’. It is proposed to increase the quantum of subsidy for the most backward blocks from the present 15 percent subject to a ceiling of `30 lakh to 20 percent subject to a ceiling of `40 lakh per enterprise.

(ii) To attract more SC/ST entrepreneurs to set up industries

During the last 3 years, only 23 SC/ST entrepreneurs (1.25 percent) were benefitted under this scheme. The GoI is insisting on setting apart 20 percent of funds under all plan schemes to SC/ST beneficiaries (19 percent for SC plus 1 percent for ST), as per 2011 Census. In order to attract more SC/ST entrepreneurs, (a) subsidy will be extended to enterprises set up by SC/ST entrepreneurs irrespective of the location and (b) capital subsidy for units tobe set up by SC/ST entrepreneurs will be increased from 5 percent or maximum of `2 lakh to 10 percent maximum of `10 lakhs. An outlay of `250 crore is proposed as capital subsidy for this scheme during the plan period.

VAT Subsidy

In the MSMI Policy 2008, reimbursement of VAT has been given only to micro manufacturing enterprises. In the structured package, incentives are being given to major industries as announced in Industries Policy 2007, VAT paid by major industries are being given as (a) Refund of sales tax/ VAT and CST for 5 years subject to ceiling of 100 percent of investment in DTA project, or (b) Soft loan against net output VAT plus CST for a period of 10 years @ 0.1 percent interest per year on 80 percent of investment made in fixed assets. The VAT

subsidy scheme will be extended to small and medium enterprises set up in backward areas also, as being given to major industries and on the investment made in plant and machinery as subsidy or soft loan, for a period of 5 years to attract investments in MSME sector in backward areas. An outlay of `25 crore is proposed for this scheme during the plan period.

Back-ended Interest Subsidy

Back-ended Interest Subsidy will be increased from the present 3 percent to 7 percent for all Micro and Thrust Sector Enterprises set up anywhere in the State and for the MSMEs set up in 251 backward blocks and 5 percent in respect of Enterprises set up in other areas. The quantum of subsidy will be increased from `10 lakh at present to `25 lakh per annum per enterprise for a period of 5 years. An outlay of ̀ 25 crore is proposed for this scheme during the plan period.

Credit Support

Unemployed Youth Employment Generation Programme (UYEGP)

The UYEGP scheme implemented by MSME Department through District Industries Centres introduced during the year 2010-11 will be continued during Twelfth Plan Period. It is proposed to provide financial assistance to 10,000 beneficiaries per annum to set up manufacturing, service, and business enterprises through banks with 15 percent as subsidy from Government. The annual outlay for subsidy component and training expenses is estimated at `18 crore per annum. An outlay of `90 crore is proposed for this scheme during Twelfth Five Year Plan Period.

Three Percent Interest Rebate Scheme

TIIC will provide credit to Micro, Small, and Medium Industries with 3 percent interest rebate, in addition to all other eligible capital subsidies available to MSME sector. An outlay of `50 crore is proposed for this scheme during the plan period.

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Rehabilitation of Sick Micro, Small and Medium Enterprises

A Policy for Rehabilitation of Sick Micro, Small and Medium Enterprises has been included as an integral part of the Micro, Small and Medium Industries Policy-2008. In the policy, the following packages of rehabilitation assistance has been envisaged:

• Conversion of the outstanding Sales tax / VAT with interest due into a soft loan for 4 years

• 4 percent interest subsidy on rehabilitation / Bridge Loans

• Implementation of the Exit Policy to be announced by the Central Government under MSMED Act 2006

• Implementation of One Time Settlement (OTS)

• Remission of the outstanding interest on Sales tax/VAT for entrepreneurs non-viable for rehabilitation

• Reduction of Power loads if it is a part of the rehabilitation package

It has been proposed to rehabilitate 500 micro enterprises and 500 small/medium enterprises during the plan period with the following assistance. Hence, a corpus fund of `50.00 crore is proposed for the setting up of a rehabilitation fund during the plan period.

Technology Support

Setting up Mini Tool Room and Training Centres in PPP mode

The Tool Room facilities are the backbone of manufacturing sector as they create tools, moulds, jigs, fixtures, gauges and precision components without which the production units cannot function. The existing Tool Room facilities in the country are not enough to cope up with the ever increasing demand for tooling as well as

skilled manpower. Hence, Ministry of MSME, Government of India under the National Manufacturing Competitiveness Programme (NMCP), is implementing a scheme “Setting up Mini Tool Room and Training Centres under the PPP Mode”, by rendering financial assistance to the private sector to set up New Mini Tool Rooms and provide technological support to MSMEs, by creating capacities in the private sector for designing and manufacturing quality tools and also to provide training facilities.

Under the scheme, projects to be set up by State Governments in cooperation with NGOs (Special Purpose Vehicle formed as a joint venture for the project), are eligible for financial assistance equal to 90 percent of the cost of machinery, restricted to `9 crore. However, in order to retain a say in the management, at least 26 percent of the share should be with State government. The remaining cost of machinery, land and building, recurring cost and any other cost will be borne by the Special Purpose Vehicle. It has been proposed to establish 4 mini tool rooms and training centres one each at Chennai, Coimbatore, Trichy and Madurai for the benefit of MSMEs under PPP mode at a project cost of `15 crore each with 60 percent Government of India assistance upto `9 crore, 26 percent from State Government upto `3.90 crore and 14 percent as SPV’s contribution.

Other PPP projects will also be promoted to rope in private investments in infrastructure projects in existing clusters, industrial estates, industrial cooperative estates and other similar ventures. An outlay of ̀ 50 crore has been proposed for this scheme during the Twelfth Plan period.

Also, a sum of `4.20 crore is proposed for Twelfth Plan for creation of Portal for technology innovation, technology transfer, exposure visit for sourcing of new technology for the MSME sector development.

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Entrepreneurial and Skill Development Support

Establishment of Entrepreneurship Development Cells (EDC) in the colleges

In order to establish the spirit of entrepreneurship amongst the youth, it is proposed to establish Entrepreneurship Development Cells (EDC) in higher educational institutions in the State. A nodal officer will be appointed from among the faculty members to coordinate the entrepreneurship promotional activities in addition to their regular duties. A nominal one time grant of `2 lakh will be provided to the EDC to purchase computers, printer, internet connectivity etc. The EDCs would eventually function as valuable extensions to training activities undertaken by the EDI, Chennai. For the Twelfth Plan, it is proposed to establish 500 Entrepreneurship Development Cells (EDC) for 20,000 students every year. An outlay of `8 crore has been proposed for the plan period.

Establishment of Youth Clubs in Schools to promote Entrepreneurship culture

An outlay of `1 crore is proposed to establish Youth Entrepreneur Clubs in reputed schools in Chennai by Entrepreneur Development Institute to promote innovation and creativity among the school children during the Twelfth Plan period.

New Entrepreneurship-cum-Enterprise Development Scheme (NEEDS)

To encourage youngsters to take up the entrepreneurial challenge, a new scheme under “New Entrepreneur-Cum-Enterprise Development Scheme” (NEEDS) has been proposed for first young generation entrepreneurs, during the Twelfth Five Year Plan. Under this scheme, educated youth will be given entrepreneur training and assistance to prepare their business plans

and to tie-up with financial institutions to set up new business ventures, besides linking them with major industrial clients. At the end of the training program, they will be assisted to get term loans from banks/ TIIC, to setup manufacturing or service enterprise with capital subsidy at 25 percent of project cost not exceeding `25 lakh and soft loans with 3 percent interest subvention.

Around 1000 entrepreneurs are expected to be trained each year under this scheme, of which, 50 percent of the beneficiaries would be women especially destitute women. The Entrepreneur Development Institute (EDI) and TIIC will play a crucial role in this scheme. An outlay of `275 crore is proposed for this scheme during the plan period.

Innovation Fund to be established to support innovation and creativity among the educated youth and facilitate venture capital assistance to deserving cases

Technology is a crucial factor contributing to entrepreneurial success in a competitive environment. Sourcing technology and networking are two important characteristics of successful entrepreneurs. There are a number of international agencies which are transferring successful technologies to the developing countries, e.g. the Asian and Pacific Centre for Transfer of Technology (APCTT) aimed at capacity building for developing and managing innovation and creativity.

Successful ideas for implementation can be identified and mentoring of such ideas to a stage of business plan preparation, product development and implementation can be done by a core advisory group to be set up in the EDI, consisting of technologists, bankers, successful entrepreneurs etc., An Innovation Fund will be set up by the Government to be administered by a Steering Group consisting of representatives from the Government in MSME Department, Finance

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Department, the EDI, Chennai, TIIC and senior academicians. The Innovation fund will be supplemented by contributions from other organizations who pursue similar objectives namely SIDBI, NABARD, State Bank of India, etc. Selected projects will be funded and their progress will be closely monitored by the EDI.

The EDI, Chennai will partner with Confederation of Indian Industry (CII), Asian and Pacific Centre for Transfer of Technology (APCTT) and Tamil Nadu Small and Tiny Industries Association (TANSTIA), Centre for Entrepreneurship Development Tamil Nadu and other similar organizations in conducting the workshops for identifying innovative ideas. In view of this, part amount of this fund will be parked with Commissionerate of Industries and Commerce for promoting such ventures. An outlay of `10 crore has been proposed for this scheme during the plan period.

Hon’ble Chief Minister’s Award for Best First Generation Entrepreneurs

It is proposed to evolve a scheme of awards to successful entrepreneurs during the Twelfth Plan period. The scheme could cover Hon’ble Chief Minister’s Award for the following categories (a) Best male entrepreneur (b) Best woman entrepreneur (c) Best SC/ST entrepreneur (d) Best BC/MBC entrepreneur (e) Best Technocrat entrepreneur, etc. District and State level Industry Associations, Chambers of Commerce, financial institutions and other stakeholders of the MSME sector with the EDI, Chennai will assist in identifying and selecting the awardees. It is proposed that a corpus fund of `50 lakh will be given to the EDI for instituting these awards to the entrepreneurs which will include a citation and a gold medal. The Government will sanction a sum of `5 lakh every year for the awards. An outlay of `1 crore has been proposed for this scheme during the plan period.

Introduction of entrepreneurship modules in the curriculum of polytechnic and engineering education

Technology and entrepreneurship should go together for launching successful commercial ventures. The application of technology in the commercial ventures needs entrepreneurial competencies. Therefore, the technocrats should have adequate exposure to entrepreneurial competencies.

Technical education in Tamil Nadu is offered at three levels: Certificate courses at the Industrial Training Institutes (ITI), Diploma courses at the Polytechnic Colleges and Degree and Post graduate degree programs in the engineering colleges at present. Entrepreneurship education does not find place in the curriculum of the above courses and therefore, it is proposed to include entrepreneur development in curriculum.

For this purpose, it is suggested that a separate academic division will be established as part of EDI, Chennai to network with the Directorate of Technical Education and Anna University to prepare a suitable curriculum for introducing entrepreneurship components. A corpus fund of `5 crore would be needed to establish the academic division and the interest earned from the corpus fund could be used to support the contributing experts. An outlay of `5 crore has been proposed for this scheme during the plan period.

Marketing Support to MSMEs

Marketing support for exhibitions/ advertisements

Constant changes in the market dynamics due to technological changes and globalization has a profound impact on the competitiveness of the MSMEs. Certain schemes suggested to enable MSMEs to augment marketing of their products are: subsidy on rentals for exhibitions conducted by MSME associations, assistance to MSME exporters of Tamil Nadu for participation

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in international fairs, publicity and advertisement charges, and reimbursement of service charge to SIDCO for marketing products of MSEs. An outlay of `8.25 crore is proposed for Twelfth Plan period.

Market Development Assistance to Coir Industry

The GOI through Coir Board introduced the scheme of Market Development Assistance (MDA) to the value of 10 percent on the average sales turnover of the preceding three years to dispose of the coir products through discounts in order to enable the coir co-operatives to provide continuous employment to their workers. The Market Development Assistance is equally shared between Central and State Governments.

This scheme will be continued during Twelfth Five Year Plan also in order to further develop the coir industry by way of marketing its products in the State and the state share being `4 crore during the plan period.

Providing e-Marketing support through a MSME portal of SIDCO

The micro and small enterprises of Tamil Nadu will be provided e-Marketing support through a MSME portal in the website of SIDCO with an outlay of `0.45 crore.

Brand building of Micro Enterprises

Assistance in obtaining trade marks for common brand building will be considered under Marketing Development Assistance Fund with an outlay of `0.25 crore.

Relaxation of turnover clause in Tamil Nadu Transparency in Tenders Act 1998 to enable participation of new enterprises in Government tenders

In Tamil Nadu, all procurements are made as per Tamil Nadu Transparency in Tenders Act 1998. However, some of the new MSEs are facing hardship in supplying their products due to the turnover clause. New Enterprises will also be invited for participation in tenders of State Government departments and State corporations, by removing this condition for new enterprises.

Purchase Preference to Products manufactured by Industrial Cooperative Societies

The Government will enlist all the manufacturing Industrial Cooperative Societies functioning under this Department, under Section 16(f) of the Tamil Nadu Transparency in Tenders Act 1998 for the direct purchase of the products manufactured by them, so as to exempt those societies from section 9 and 10 of the said Act. This amendment is necessary so as to enable to make direct purchase of their products by the procuring entities as listed in the section 2 (e) of the said Act.

Fig.8.3.6: Coir Products

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Table 8.3.2: Twelfth Plan Outlay - Micro, Small and Medium Enterprises (` crore)

S.No. Name of the Scheme Outlay

I Infrastructure Support Schemes 1 Creation of Common Facility Centers under MSE-CDP Scheme 24.452 Upgradation of existing industrial Estates under MSE-CDP Scheme 14.563 Revamping of District Industries Centres 50.00

Total 89.01II Incentive Support Schemes 1 Capital Subsidy 250.00

2 VAT Subsidy to MSMEs 25.00

3 Back-ended interest subsidy 25.00

Total 300.00III Credit Support

1 Unemployed Youth Employment Generation Programme(UYEGP) 90.00

2 3 percent Interest rebate to units financed by TIIC 50.00

3 Rehabilitation of Sick Micro, Small and Medium Enterprises 50.00

Total 190.00IV Technology Support 1 Setting up Mini Tool Room & Training Centres under the State PPP

Mode50.00

2 Creation of portal/ technology transfer/ exposure visit 4.20Total 54.20

V Entrepreneurial and Skill Development Support 1 Establishment of Youth Clubs in Schools to promote

Entrepreneurship Culture 1.00

2 Establishment of Entrepreneurship Development Cells (EDC) in the colleges of Tamil Nadu

8.00

3 New Entrepreneurship-cum-Enterprise Development Scheme (NEEDS)

275.00

4 Innovation Fund to be established to support Innovation and Creativity among the educated youth

10.00

5 Chief Minister’s Award for Best First Generation Entrepreneurs 1.006 Introduction of entrepreneurship modules in the curriculum of

Polytechnic and engineering education5.00

Total 300.00

Twelfth Plan Outlay for MSME Sector

An outlay of `946.16 crore is earmarked for MSME sector for Twelfth Five Year Plan as shown in Table 8.3.2.

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Table 8.3.2: Twelfth Plan Outlay - Micro, Small and Medium Enterprises (Contd.) (` crore)

S.No Name of the Scheme Outlay

VI Marketing Support

1 Marketing Support by way of Hall Rent/Sub-pavilion reimbursement in the State as well as outside the State

1.25

2 Marketing Support to Exporters of MSMEs for participation in International Fairs towards Stall Charges and Air-fares

5.00

3 Service Charges to SIDCO for participation in Govt. Tenders on behalf of MSEs

0.50

4 Assistance through MSME portal 0.45

5 Publicity and Advertisement of MSME Products 0.25

6 Assistance to Brand Building of MSEs 0.25

7 Market Development Assistance for Coir Products(State Share) 4.00

8 Advertisement for marketing of Ooty Tea 1.25

Total 12.95

Grand Total – MSME 946.16

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8.4 VILLAgE AND RURAL INDUSTRIES

HANDICRAFTS

Introduction

Handicrafts play a vital role in the economy and provide employment and foreign exchange through exports. Handicrafts sector occupies a place of pride in preserving the country’s heritage and culture. The State has been implementing various schemes to preserve the crafts and the welfare of artisans.

Bronze icon, brass lamps, Thanjavur art plates, stone carving and wood carvings are the traditional crafts of Tamil Nadu. The present status of handicrafts in Tamil Nadu is encouraging. The artisans engaged in various crafts get proper guidelines and marketing assistance from Government agencies, which also provide the raw materials at affordable prices. While, 1.60 lakh artisans have registered in Tamil Nadu, the sector is still largely unorganized. Government has issued identity cards for the benefit of the artisans.

Tamil Nadu Handicrafts Development Corporation (TNHDC) Limited

The main objectives of the Corporation is to provide marketing assistance to the artisans and implement various schemes for the development of the craft and craftsmen. The Corporation has 15 showrooms in the trade name “Poompuhar”, through which it provides marketing assistance to the artisans for the sale of their products. It also organizes a number of exhibitions throughout the country to find more marketing opportunities for the artisans and implements schemes for training, design development, etc.

Eleventh Plan PerformanceOf the outlay of `3.80 crore provided

for the Handicrafts sector, only a sum of ` 0.93 crore was spent during the plan period. The financial performance is shown in Table 8.4.1.

Table 8.4.1: Performance during Eleventh Plan(` crore)

S.No. Schemes Proposed Outlay

Actual Performance

Physical achievement

1 Setting up of Urban Haat 0.60 - -

2 Cluster approach for sustainable growth 0.25 0.09 100

3 Common Facility for cluster Development at Swamimalai and Coimbatore

0.25 - -

4 Health and Insurance cover and livelihood security for artisans in Handicrafts sector on par with Handloom Weavers

0.20 0.20 10000

5 Technology upgradation and marketing 2.00 0.16 -

6 Renovation of showrooms 0.50 0.48 50

Total 3.80 0.93

Source: Dept. of Handlooms, Handicrats, Textiles & Khadi Dept, GoTN

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The production and sales performance of Tamil Nadu Handicrafts Development Corporation Limited during the Eleventh Five Year plan period are given in Table 8.4.2.

Twelfth Five Year Plan Objectives

The main objective is to focus on the development of traditional crafts of Tamil Nadu with greater momentum, marketing of handicrafts produced by artisans of Tamil Nadu, to improve the productivity and quality of handicrafts with encouragement to the innovations in designs and reduce the occupational hazards to artisans and ensure socio-economic security for craftsmen. More focus towards the development of handicrafts and the encouragement to artisans forms the crux of Twelfth Five Year Plan.

Schemes in the Twelfth Five Year PlanDesign Centre for Research with Library

The scheme plans to have its own design centre for research with library, with technical assistance of National Institute of Fashion Technology (NIFT) and National Centre for Design and Product Development (NCDPD). An amount of `4.50 crore is earmarked for this scheme.

Table 8.4.2: Production and Sales during Eleventh Plan

(` crore)Year Sales &

Service charges

Production

2007-08 21.30 2.54

2008-09 22.25 3.05

2009-10 22.28 3.33

2010-11 25.52 3.40

2011-12 28.00 5.00

Source: Working Group Report, Handlooms, Handicrats, Textiles & Khadi Dept, GoTN

Skill Upgradation

i)Training in Wood Carving Technology

The Tamil Nadu Handicrafts Development Corporation Ltd., has its own production centre at Kallakurichi, Villupuram district. It provides employment to the artisans of wood carving in and around Salem district. i.e., Chinna Salem, Arumbavur, Thammampatty. It is proposed to provide intensive training in wood carving craft, as in Rajasthan, to 100 artisans at the rate of 20 artisans per year at Kallakurichi, Arumbavur at the cost of `1 crore during the plan period.

ii) Training in Brass Sand Casting Technique

The Corporation has its own production units for brass lamps at Nachiarkoil, Madurai and Vagaikulam. It is proposed to provide training for making thinner variety of metal casting similar to that in Moradabad, which is a noted craft centre for brassware to the artisans of Tamil Nadu, at a cost of `1 crore.

Fig.8.4.1: Wood carving

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iii)Training for Traditional Crafts

Training programmes are proposed to be conducted in the production centres of

ii) Renovation of Showrooms

It is proposed to renovate 15 showrooms with an outlay of `1 crore.

iii)Marketing Centre for Brass and Bronze at Chennai

Marketing societies are functioning in Swamimalai for bronze and in Nachiarkoil for brass lamps. It is proposed to set up a marketing centre for brass and bronze lamps in Chennai at `6 crore. TNHDC will ensure that the artisans engaged in these crafts are enrolled with the Corporation based on their willingness to supply the products. The list of the artisans so enrolled will be updated in the website and this platform will be wide open for the global market.

iv)Subsidy for Raw Material Bank

The Corporation has proposed a subsidy to the extent of 20 percent of the sale value of the metal to artisans sold by raw material bank. The cost subsidy for raw-material bank is `5 crore for five years.

v)Insurance Coverage to artisans

It is proposed to cover the artisans in handicrafts sector who are in the unorganized sector and do not have any social security under the insurance scheme with an outlay of `0.90 crore in the Twelfth Plan.

vi)Pension Scheme for artisans beyond 60 years

It is proposed to cover the artisans of all crafts in Tamil Nadu who are beyond the age of 60 under the new pension scheme. The outlay proposed for this scheme is `1.50 crore.

vii)Thematic Exhibitions Abroad

The Corporation has been organizing thematic exhibitions for the past two years in Singapore at Serangoon Road and achieved good sales. To organize thematic exhibitions at Kuala Lumpur, Malaysia and other nearby Asian countries, a sum of `2.50 crore is proposed during the Plan period.

the Corporation for the traditional crafts with syllabus based on the Hindu mythology and South Indian iconography for certain crafts, with an outlay of `0.50 crore.

Marketing Support

i) Special Exhibitions

In order to tap the potential customers and expand the base of higher income groups, it is proposed to conduct special/thematic exhibitions at five star hotels in metros every year with an outlay `1.25 crore during the plan period.

Fig.8.4.2: Brass lamp

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Table 8.4.3: Twelfth Plan Outlay - Handicrafts Sector(` crore)

S.No. Name of the scheme Outlay

1 Design Centre for Research with Library 4.50

2 Skill Upgradation(a) Training of wood carving Technology of Rajasthan 1.00(b) Training of Brass Sand casting technique of Moradabad 1.00

3 Training for Survival of Traditional crafts 0.50

4 Marketing Support(a) Special exhibitions (at Star Hotels) 1.25(b) Renovation of Showrooms 1.00

5 Marketing Centre for Brass and Bronze at Chennai 6.00

6 Subsidy for Raw-material Bank 5.00

7 Insurance coverage to artisans 0.90

8 Pension scheme for artisans beyond 60 years 1.50

9 Thematic exhibitions abroad 2.50

10 Commissionerate of Handicrafts for welfare of artisans 10.00

11 Construction of showroom building at Salem 1.10

Total 36.25

viii)Improvement of Tamil Nadu Handicrafts Development Corporation Ltd.

Tamil Nadu Handicrafts Development Corporation has proposed welfare measures

for the artisans viz., Working capital to be sanctioned to artisans, introducing and providing improved tools, infrastructure development of the workshed and marketing assistance to enter into global market. In order to undertake these measure, a sum of `10.00 crore is proposed for the plan period.

ix) Construction of Showroom at Salem

For construction of showroom building for Poompuhar at Salem in the land given by the local body, `1.10 crore is proposed for the plan period.

Twelfth Five Year Plan Outlay for Handicrafts

An outlay of ̀ 36.25 crore is earmarked for Handicrafts sector for Twelfth Five Year Plan. The details of outlays for various schemes are shown in Table 8.4.3.

Fig.8.4.3: HandicraftExhibits

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KHADI AND VILLAGE INDUSTRIES

IntroductionKhadi and Village Industries sector

in the State provides livelihood for a large section of rural poor with low investment using locally available resources. The sector comprises of units run by Khadi and Village Industries Board (KVIB), units run by Sarvodaya Sanghs and other Khadi & Village Industries Commission (KVIC) certified institutions and those run by individual artisans/SHGs in rural areas. Khadi sector

comprises of units producing hand spun yarn on charkhas and clothes produced on handlooms using handspun yarn. Khadi cloth is instrumental in creating large scale meaningful and productive employment in rural areas. The current situation in khadi sector is not very encouraging with production and employment dwindling over years.

KVIB has set up number of rural spinning centres and textile centres to improve linkages in this sector. The main products are cotton, silk and polyvastra varieties. There are about 6969 charkhas and 3898 looms in the State engaged in khadi production. The major khadi silk clusters are in Kumbakonam, Salem and Kancheepuram areas.

Village Industry is defined as any industry located in rural areas with fixed capital investment not exceeding one lakh rupees per head of artisan / worker. It is labour intensive and offers attractive policy

options to tackle rural unemployment/ under employment. Tamil Nadu Khadi and Village Industries Board promotes village industries by establishing production centres, organizing cooperative societies and by promoting SHG entrepreneurs to set up units through margin money scheme. It also supports these units through provision of technical guidance and marketing support

via khadi crafts. The major village industries promoted by KVIB are leather products, beekeeping, oil and soap industry, pottery, handmade paper, palmgur and carpentry and black smithy.

In addition, small scale food processing, handicrafts and small scale garment units are also on the priority list.

The palm products industry is under the fold of Tamil Nadu Palm Products Development Board. There are around five crore of palmyarh trees in Tamil Nadu. Palm tree yields various medicinal and high value products such as Neera, palm jaggery powder, palm candy, etc. There are 996 Palm Jaggery Cooperative Societies, 8 District Palmgur Marketing Co-operative Federations and one Tamil Nadu State Palmgur and Fibre Marketing Co-operative Federation under the control of Board. Variety of products such as brushes, baskets, leaf plates and hand crafted decorative items are also being manufactured.

Eleventh Plan PerformanceAn outlay of `136.98 crore was

provided for Khadi and Village Industries during the Eleventh Plan period. An expenditure of `3.64 crore was incurred

Fig.8.4.4: Khadi Products

Fig.8.4.5: Products of Village Industries

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partly due to crisis-ridden KVIB and partly due to lack of enthusiasm arising out of declining demand and production.

The major constraints plaguing KVI sector are viz., obsolete machinery and technology and inadequate efforts to upgrade them, insufficient support to the process of product innovation through systematic research and development (R&D), inadequate working capital, quality issues and absence of standardization, low value addition leading to poor wages and subsequent drifting of artisans into wage employment, inability to sustain the market for khadi products in a market dominated by machine made products, outdated marketing systems, inadequate brand awareness and erosion of brand value.


Objectives

The major objectives of the Twelfth Five Year Plan are to expand the employment base, to develop entrepreneurial attitude among the artisans and institutions under khadi and village industries and to increase the income of the artisans.

Strategies

• Positioning Khadi and Village Industries products as handmade, eco-friendly, energy saving and healthy

• Identifying product-wise clusters of KVI products and facilitating provision of credit, technology, marketing inputs, skill development and infrastructure in an integrated mode

• Ensuring that further development of KVI sector is done in a cluster-mode so as to ensure sufficient backward and forward linkages

• Introducing innovations in design, technology and production processes through interface with premier institutions such as NID, IITs and such other technical institutions to effect sufficient value

addition and to help KVI products to move up the value chain.

• Creating an appropriate delivery mechanism out of the existing network of KVIC certified institutions, NGOs, Cooperative societies and PLFs to serve this sector.

• Developing convergence with other departments to ensure flow of adequate funds and expertise.

Schemes for the Twelfth Five Year Plan

Design Development

KVI products are handmade and are made using local resources. Unique designs and product innovations have to be introduced to compete with machine made products. This has to be done through market surveys for which premier institutions like National Institute of Designs (NID) has to be roped in. Further they can be labelled as organic and eco-friendly which can add to their market value. A sum of `5 crore is allocated for the Twelfth plan for design development.

Modernisation of Looms

In khadi sector, charkas and handlooms embody antique technology resulting in drudgery and low productivity. To improve the efficiency and productivity, the machinery and 8- spindle charkhas have to be reengineered. A sum of `5 crore is allocated during the plan period for this purpose.

Replacement of Charkhas

There is a need to replace existing charkas and handlooms. Currently, there are 6969 charkas and 3898 handlooms. Atleast 75 percent of these will be replaced out of grants and the remaining will be replaced through Market Development Assistance (MDA) and funds available under other schemes. A sum of `20 crore is allocated in the plan period.

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Marketing Support

Marketing of khadi products has traditionally been done by provision of rebate both by Government of India and Government of Tamil Nadu. From 2009-10 KVIC has replaced Rebate with Market Development Assistance (MDA) at the rate of 20 percent on the value of production where 5 percent will be given as incentive to spinners/ weavers and balance 15 percent will be spent on items such as discounts, capital investment and capacity building. Government of Tamil Nadu will switch over to a matching grant of 20 percent on value of production in form of MDA where 5 percent can be given as incentive to artisans and the remaining 15 percent be used for capacity building. This will help Khadi and Village Industries Board and Certified Institutions to reduce cost of production and give them flexibility in pricing as per market conditions. An outlay of `5 crore is allocated for this under the Twelfth Plan.

Skill Development

Skill development is another crucial area, both in production and in marketing. It will comprise of training, exposure visits, apprenticeship with master artisans and entrepreneurship development. A sum of `5 crore is allocated in the Plan period.

Workshed

Government of India gives assistance for construction of workshed for khadi weavers at `45/-per shed. It is proposed to give assistance from state funds for 1250 weavers for the construction of workshed and a sum of `5.55 crore is proposed in the Twelfth Five Year Plan period.

Margin Money to Co-Operative Societies

To revive the co-operatives of khadi industries, it is proposed to provide margin money assistance to the co-operatives and a sum of `17.50 crore is earmarked for this scheme in the Plan period.

Bee Keeping

Bee Keeping is an important activity in KVI sector. Apart from generation of income and employment, this helps in improving agriculture and horticulture productivity. It is estimated that horticulture productivity will go up by 15-20 percent with apiculture. A sum of `2 crore has been earmarked in the Twelfth five year plan .

Propaganda and Publicity, Brand Building & Renovation of Khadi Crafts

Market Promotion and Publicity is a prerequisite to market handicrafts, eco-friendly and durable products to reach the customers and help khadi and village industries to register higher sales and add value addition to their sales. In addition, board’s outlets which are the base of authentic Khadi and Village Industries products need to be renovated and refurbished. A sum of `10 crore has been allocated in the Twelfth Five Year Plan for propaganda and publicity of khadi products, brand development and renovation for the entire crafts.

Twelfth Five Year Plan Outlay for Khadi and Village Industries

An outlay of ̀ 75.05 crore is earmarked for Khadi & Village Industries sector for the Twelfth Five Year Plan. The scheme wise allocation of outlay is given in Table 8.4.4:

Fig.8.4.6: Products of Village Industries

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Table 8.4.4: Twelfth Plan Outlay - Khadi and Village Industries

(` crore)S.No.

Name of the scheme Outlay

1 Design development 5.00

2 Modernisation of looms

5.00

3 Marketing Support 5.00

4 Replacement of charkas

20.00

5 Skill development 5.00

6 Workshed 5.55

7 Margin money to cooperative societies

17.50

8 Beekeeping 2.00

9 Propaganda and Publicity, brand building and renovation of khadi crafts.

10.00

Total 75.05

SERICULTUREOverview

India is the second largest producer of raw silk after China and the highest consumer of raw silk fabrics in the World. In India, sericulture is essentially a village-based industry providing employment to a sizable section of the population. Although sericulture is considered as a subsidiary occupation, technological innovation has made it possible to extend it and enhance income generation. It is also capable of providing continuous income to farmers. All the known varieties of silk, viz. Mulberry, Eri, Muga and Tussar are produced in India. Mulberry silk is the most popular variety in India, contributing more than 87 percent of the country’s silk production. Silk and silk goods are very good foreign exchange earners.

In India, mulberry is cultivated mainly in five states, viz., Karnataka, Andhra Pradesh, Tamil Nadu, West Bengal and Jammu & Kashmir. These five states collectively account for 97 percent of the total area under mulberry cultivation and 95 percent of raw silk production in the country. Majority of the silk produced in India is consumed for production of handloom sarees. Bivoltine silk excels in quality and is mostly produced in countries having temperate climate.

Sericulture in Tamil Nadu

Sericulture was limited to certain pockets of Coimbatore and Dharmapuri districts in 1956 in the State with mulberry cultivation in an area of 500 hectares only. With the implementation of many development schemes in the State, sericulture activity was introduced into the plains of the State. At present 20,165 farmers are involved in Sericulture in Tamil Nadu, cultivating 31,362 acres of mulberry providing employment opportunities to nearly 1.5 lakh people.

Tamil Nadu occupies fourth position in the country in silk production. The annual silk production in Tamil Nadu is around 1200 metric tonnes. It is well known for its traditional silk sarees and dhoties woven on handlooms and Kancheepuram, Arni, Kumbakonam, Salem, Coimbatore, Madurai and Tirunelveli are important weaving centres in Tamil Nadu. Tamil Nadu Co-operative Silk Producers Federation, TANSILK, an apex co-operative body, with headquarters at Kancheepuram and branches at Kancheepuram, Arni, Kumbakonam, Salem, Erode and Coimbatore, is functioning for the purchase of raw silk and ready silk and supplying it to the Handloom Weavers Co-operative Societies and other weavers.

Marketing Activities

Cocoon Market

There are 19 Government cocoon markets located in various places of Tamil Nadu. The farmers harvest the cocoon and

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bring the same to cocoon markets for selling their produce. The floor price is fixed on basis of testing the cocoon. The raw silk producers (Reelers) also come to the market for purchasing the cocoon from farmers. Government cocoon markets are involved in marketing activities and aids smooth transaction between the sellers and the buyers.

Anna Silk Exchange

The reelers of Tamil Nadu bring the silk produced by them to the Anna Silk Exchange for sale. All the silk lots brought this way are first tested for quality at the silk conditioning and testing house at Kancheepuram. Then

the floor price of each silk lot is fixed based on the average silk price in Karnataka and the quality of the particular lot. Then the silk lots are put up for auction. TANSILK, Silk Weavers Co-operative Societies, twisters and other consumers participate in the auction.

Fig 8.4.7: Cocoon Markets in Salem

Fig.8.4.8: Anna Silk Exchange, Kanceepuram

The exchange ensures spot payment to the reelers.

TANSILK

The main objective of the federation is to procure raw silk yarn and twisted silk and market the same to its members like

weavers co-operative societies and other bulk consumers in the quasi-government sector such as Khadi and Village Industries Board and Sarvodaya Sanghs. The federation is unique in its setup, in which both producers and consumers are members. TANSILK purchases raw silk of the silk reelers through the Anna Silk Exchange at Kancheepuram and supplies to its twister members for further process of twisting. Such twisted silk (Ready silk) is purchased from the twisters and supplied to the silk handloom weavers’ co-operative societies, Khadi and Sarvodaya Sangh.

Financial and Physical Performance of Eleventh Five Year Plan

An outlay of `68.09 crore was provided for Sericulture during the Eleventh Plan period and the expenditure incurred was `31.11 crore. The details of physical performance is shown in Table 8.4.5.

Fig 8.4.9: Silk Saree

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Table 8.4.5: Physical Performance of Eleventh PlanS. No. Item Units Target Achievement

1 Raw Silk Production Metric tonnes 4000 1525

2 Cocoon Production Metric tonnes 26880 10675

3 Silkworm Disease FreeLayings Consumption

Lakh 420 164

4 Mulberry Area Acres 75000 36000


Objectives• To bring an additional area of 25,000 acres

under mulberry in a span of 5 years

• Planting high yielding mulberry varieties

• Adopt cluster approach

• Sericulture farmers are to be educated in soil nutrition and usage of disinfectants

• Popularizing robust /disease tolerant silkworm races and high yielding mulberry variety amongst farmers to increase yield

• Increase Government grainages’ production and promotion of chawkie rearing concept

• To produce 2,000 metric tonnes of raw silk by the end of the plan period

• Increase the Bivoltine silk production from 30 percent to 40 percent of total silk production

• Strengthening of cocoon markets

• Greater thrust in post cocoon sector to bridge the demand and supply gap and to facilitate consumption of cocoons produced in the state itself

• Establishing more cottage basin/ multi-end reeling and automatic reeling units

• Expansion of existing units & revival of closed units

• Upgradation of looms

• Create greater opportunities for gainful employment in rural areas

• Continuing the crop insurance and health insurance schemes to all farmers

Schemes proposed for Twelfth Five Year Plan

Developmental schemes viz., Catalytic Developmental programme is implemented through Central Silk Board (Government of India). Apart from the programme, allocations under Area development programmes like Western Ghats Development Programme and Hill Area Development Programme have also been made by Government of Tamil Nadu for sericulture developmental activities.

Catalytic Development Programme

Central Silk Board (Government of India) has proposed to implement various components of activities for the development of sericulture in Tamil Nadu under the Catalytic Development Programme schemes during plan period with some modifications.

• Assistance for planting of high yielding mulberry varieties for increased cocoon and silk production

• Assistance for installation of drip irrigation system in mulberry gardens to conserve water

• Assistance for construction of separate silkworm rearing houses to conduct silkworm rearing with hygiene and health

• Assistance for procurement of improved silkworm rearing equipments to reduce labour and to ensure successful cocoon harvest

• Supply of quality disinfectants to control

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diseases in silkworm rearing and to avoid cocoon crop losses

• Assistance to establish young age silkworm (chawkie) rearing centres to ensure the success of cocoon crops through professional and scientific management of chawkie rearing

• Assistance for strengthening silkworm seed production units

• Assistance for strengthening the silk reeling sector to facilitate farmers to sell their cocoons locally instead of going to neighbouring States

• Health Insurance scheme for stakeholders and their family members Insurance coverage for Silkworm crop and assets

The Central Silk Board has proposed a total project cost of `492.14 crore under Catalytic Development Programme, for which the State share is `117.23 crore, Central Silk Board share of of `265.85 crore and the balance of `109.05 crore to be met by the beneficiaries. Central Silk Board has fixed a target set to produce 2,000 metric tonnes of silk in Tamil Nadu under Catalytic Development Programme plan by the end of Twelfth Five Year Plan.

Western Ghats Development Programme

Sericulture is an agro based industry in which tribals are engaged in the hills. The scheme shall propose for the infrastructure development in the Western Ghats belt area. A sum of `5.58 crore is proposed for Twelfth Five Year Plan.

Hill Area Development Programme

The scheme is proposed mostly for the development of Hill area farmers. Under hill area beneficiary oriented schemes, the supply of mulberry saplings to farmers, training to farmers in mulberry cultivation and silkworm in rearing and supply of equipments for silkworm rearing are proposed to the development of farmers. In addition to that for the benefit of hill area farmers, irrigational

wells, installation of sprinkler system, and rearing work is proposed for an amount of `0.876 crore with State Government share of `0.37 crore and the beneficiary share `0.506 crore.

Twelfth Five Year Plan Outlay for Sericulture

For the Twelfth Five Year Plan, a State share of `123.18 crore is earmarked for Sericulture sector. The details are given in Table 8.4.6:

8.4.6: Twelfth Plan Outlay - Sericulture(` crore)


1 Catalytic Development Programme

117.23

2 Western Ghats Development Programme

5.58

3 Hill Areas Development Programme

0.37

Total 123.18

Twelfth Five Year Plan Outlay for Village and Rural Industries

An outlay of `234.48 crore is earmarked for Village and Rural Industries sector for the Twelfth Five Year Plan as shown in Table 8.4.7:

Table 8.4.7: Twelfth Plan Outlay - Village and Rural Industries Abstract (` crore)

S.No. Sectors Outlay1 Handicrafts 36.25

2 Khadi and Village Industries

75.05

3 Sericulture 123.18

Total – Village and Rural Industries 234.48

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8.5 hANDLooMS AND TEXTILES

Introduction

Textile Industry plays a very important role in the industrial field with regard to employment potential, overall economic and commercial linkages. The strength of the Indian textiles and clothing industry is based on the long tradition of manufacturing, strong raw material base, indigenous design capabilities, presence in the entire value chain, large and growing domestic demand, and the availability of trained manpower at internationally competitive rates. The Indian textile and clothing industry consumes a diverse range of fibres and yarns but cotton plays a predominant role.

Textile Industry of Tamil Nadu has a significant presence in the National and State economy. Handloom, Powerloom, Spinning, Processing, Garment and Hosiery are the various sectors of the Textile Industry in Tamil Nadu which provides for high employment levels.

Handloom Sector occupies a place of pride in preserving the country’s heritage and culture and plays a vital role in the economy.It has a long tradition par excellence in its craftsmanship. The Powerloom Sector in Tamil Nadu has also been playing an important role in meeting the clothing needs of the people. Textile Sector in Tamil Nadu is predominantly in the private sector, spinning oriented and labour-intensive with large scale decentralisation. This industry earns substantial revenue besides foreign exchange through exports.

Textile Scenario of Tamil Nadu

Handloom Sector

Handloom industry is the largest and most important industry in India. It provides employment to a large number of people living in rural and urban areas. There are 38.47 lakh Handlooms in India, out of which 3.19 lakh

Handlooms are in Tamil Nadu which provide employment to about 6.08 lakh weavers. Out of 3.19 lakh handlooms in Tamil Nadu, 2.07 lakh handlooms are functioning under Handloom Weavers’ Cooperative Societies and the rest are outside of the cooperative fold. Out of 1182 Handloom Weavers’ Co-operative Societies, 1035 are Cotton Primary Weavers’ Co-operative Societies, 61 Industrial Weavers Co-operative Societies and the remaining 86 are Primary Silk Weavers Co-operative Societies.

All the development and welfare schemes of the State Government intended for the handloom weavers are being channelised through Weavers’ Cooperative Societies. These Societies mostly exist in rural and semi-urban areas where there is large concentration of handloom weavers.

Powerloom Sector

Powerloom sector in Tamil Nadu plays significant role in catering to the clothing needs of the people. In the liberalized economic environment, the delicensed powerloom sector has been steadily registering good progress and providing more employment. Production of cloth as well as generation of employment has been rapidly increasing in this sector. It also contributes significantly to the export earnings of the country. This sector provides employment to around 11.16 lakh workers in Tamil Nadu. As against 22.92 lakh registered powerlooms in India, 4.58 lakh powerlooms are located in Tamil Nadu, of which, 39,241 powerlooms are functioning under 184 powerloom Weavers Co-operative Societies. The cloth production in the powerloom sector in Tamil Nadu is about 10,800 million sq.metre.

The Powerloom Weavers’ Co-operative Societies in the State assist in the production of cloth required for Government Schemes like Free Supply of Dhothies and Sarees to the poor and Free Supply of Uniforms to the

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school children etc. During the year 2010-11, the Powerloom Weavers’ Co-operative Societies in the State have produced 1190.09 lakh metres of cloth worth around `304.14 crore and the sales of the cloth by these societies stood around `306.71 crore and during the year 2011-12, nearly 7200 million sq.mts of powerloom fabric have been produced by the powerloom sector in Tamil Nadu.

Spinning Sector

The spinning mills are the backbone of the State’s industrial development. Tamil Nadu holds the premier position in the country, both in terms of spindleage and production of yarn. The spinning sector is the most power intensive sector of the textile sub-sectors and is predominantly cotton based. During the year 2011-12, there were 3293 small, medium and large textile mills in India, of which, 1997 mills were located in Tamil Nadu with 22.24 million spindles. Tamil Nadu produced about 1885 million kgs of spun yarn which is 40 percent of the national production of 4714 million kgs. of spun yarn.

Spinning industry has been able to keep pace with international technological trends to a fair degree through its own efforts, and by taking advantage of the concessional loans under the Technology Upgradation Fund Scheme (TUFS) of the Government of India. To compete in the global and national level in the spinning segment, it is necessary that the modernization and technological upgradation process should continue through expansion of capacity and replacement of obsolete spindles.

Processing Sector

Processing sector is the most significant and critical process in the textile value chain, contributing to essential user requirements and also aesthetic value addition. The processing of textiles involves two types i.e., (i) the bleaching and dyeing of

yarn for the production of yarn dyed dress materials and home textiles and (ii) the bleaching, dyeing and printing of grey fabrics into finished goods like sarees, dhoties, home textiles, etc. With the world trade in textiles likely to witness increasing shift in trade of value added products, rapid investments in eco-friendly processing sector is the need of the hour.

In Tamil Nadu, grey fabrics and yarn dyed fabrics are produced in equal quantities and, therefore, the processing facilities, for processing of yarn as fabrics has remained the basic requirements of the industry. The yarn processing units are carrying out yarn dyeing and bleaching facilities, whereas the second category of units comprise of woven fabric processing with or without yarn processing facilities.

It is estimated from the secondary sources, that there are nearly 3000 hand processing units and 1000 power processing units in Tamil Nadu, providing employment to about 1.5 lakh persons. However, a majority of power processing units are exclusively linked to processing knitted fabrics and only a sparse number of power processing units including yarn dyeing, seemed to cater to other sub-sectors.

Another noteworthy point regarding the Tamil Nadu textiles sector is that due to the rapid and phenomenal growth of the hosiery sector in Tiruppur, the development of processing units exclusively for the hosiery sector is taking place in Tiruppur, Perundurai, Erode and Coimbatore areas at a faster phase. However, due to strict observance of effluent discharge systems in dyeing and bleaching houses, by Central and State Pollution Control Boards and interventions by the Courts of Law, many Effluent Treatment Plants and their associated dyeing and bleaching units in these areas were closed down. Due to this, the fabric manufacturing sectors face much difficulty in dyeing and the cost of dyeing also has increased substantially. The availability of processing facilities needs to

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be significantly improved which will have manifold increase in the development of this industry in a more integrated and systematic manner.

Performance during Eleventh Five Year Plan

All sub sectors of the Textile Industry viz. Handlooms, the Powerlooms, the Mills, the Processing and Knitting and Garment sub

sectors have consolidated their position in the State. Tamil Nadu occupies commendable position with respect of installed spindles, yarn and knit-wear production ,exports and also on installed powerlooms and strength of handlooms. The details of the sector are shown in Table 8.5.1.

Table 8.5.1: Textile Industry – All India vs Tamil NaduHandloom sector Spinning sector

Details All India Tamil Nadu Details All India Tamil

Nadu

Handloom sector Spinning sector

No. of looms (in lakh) 38.47 3.19 No. of mills 3293 1997

No. of weavers (in lakh) 43.31 6.08 No. of Spindles (in million) 47.39 22.24

Sales Value (` crore) 35,000 1,800 No. of workers (in lakh) 8.83 2.62

Powerloom Sector Hosiery & Garment sector

No. of units (in lakh) 5.18 1.18 No. of units 12645 2500

No. of Reg. power looms (in lakh)

22.92 4.58 No. of workers(in lakh) 6.00 3.20

No. of workers (in lakh) 57.29 11.16

Source: Dept. of Handlooms & Textiles,GoTN

An outlay of `1942.75 crore was provided for the Handlooms and Textiles sector for the Eleventh Five Year Plan and the expenditure incurred was `1131.62 crore during that period. The major schemes implemented were:

• Free Power Supply to Handloom Weavers

• Co-operative Handloom Weavers’ Savings and Security Scheme

• Tamil Nadu Co-operative Handloom Weavers’ Old Age Pension Scheme

• Tamil Nadu Co-operative Handloom Weavers’ Family Pension Scheme

• Health Insurance Scheme for Handloom Weavers

• Mahatma Gandhi Bunkar Bima Yojana

• Insurance Scheme for Handloom Weavers

• Payment of Scholarship under Shiksha Sahayog Yojana

• Interest Subsidy Scheme

• Integrated Handlooms Development Scheme

• Cluster Development Programme

• Group Approach for Development of Handlooms

• Marketing Incentives

• Rebate Subsidy Scheme

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Table 8.5.2: Review of Eleventh Plan – Physical Targets and Achievements

S.No. Schemes Details Target Achievement

1 Co-operative Handloom Weavers Savings and Security Scheme

No. of Weavers enrolled

30000 25120

2 Bunkar Bima Yojana Scheme No. of Weavers enrolled

30000 63670

3 Free Distribution of Sarees and Dhoties Scheme (units in lakhs)

a) No. of Sarees supplied

820 801

b) No. of Dhoties supplied

820 797

4 Health Insurance Scheme No. of Weavers enrolled

30000 149023

5 Co-operative Handloom Weavers Old Age Pension Scheme

No. of Weavers - 4821

6 Co-operative Handloom Weavers Family Pension Scheme

No. of Weavers - 630

Source: Dept. of Handlooms and Textiles, GoTN

Recommendations in Handlooms and Textiles Sector

Handloom Sector

• Interest Subvention of 4 percent to be provided to handloom sector on par with crop loan by Government of India. It would enable Weavers Co-operative Societies to get working capital loan at a lesser rate of Interest i.e., 11.5 percent to 8 percent (GOI-4 percent and GOTN-4 percent)

• Health Insurance Scheme- 1) The overall Health Insurance coverage to be enhanced to ̀ 50,000 instead of ̀ 15,000 2) Bio-Metric Card shall be issued to weaver members under this scheme. 3) Mobile OPDs will be introduced to reach the interior villages where no medical facilities are available 4)To include few more serious ailments as critical illness care in insurance coverage

• Policy under Mahathma Gandhi Bunkar Bima Yojana Scheme to be treated as Endowment Policy with a suitable survival benefit for weavers with membership

• Age limit for providing Life Insurance coverage shall be enhanced upto 70 years as against 59 years. Similarly the scholarship amount under Shiksha Sahayog Yojana Scheme to be extended to lower class also instead of existing classes 9th to 12th Std.

Powerloom Sector• Technological Upgradation - Most of the

existing looms are ordinary powerlooms resulting in low productivity and cloth produced is not of high quality. Hence, they need to be modernized and upgraded

• Yarn Bank – To cushion the high fluctuation price in yarn market, yarn bank with materials shall be established as clusters

Physical Performance

The physical target and achievement during the Eleventh Plan is given in Table 8.5.2.

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• Designing and Testing Facilities- Infrastructure of Powerloom Service Centres established by Government of India needs to be improved to cater to the demands of the powerlooms located in the respective clusters

• Encouraging captive power plants - Wind power generation in powerloom concentrated clusters shall be encouraged for which suitable Government assistance will be provided

• Power Subsidy - Power Subsidy to be extended to ongoing workshed scheme for number of powerlooms

• Group Workshed scheme - The powerloom weavers shall be encouraged to avail the benefit of this scheme

• Market Interaction Centre – Marketing centres to be established at Palladam and Salem in Tamil Nadu which will disseminate marketing information to the powerloom owners to improve their marketing

• Skill Development - For promoting the development and growth of decentralized powerloom sector, Powerloom Service Centres need to be enlarged but few new fields of activity have to be added to cater to the need of increasing opportunities in the whole textile value chain

• Insurance Scheme - The existing Group Insurance Scheme need to be implemented, in a more effective manner for which awareness will be created among the weavers. The Powerloom Owners Association will be linked to this scheme, so as to pay the premium as an employer of the weavers

• Exposure Visit to Powerloom weavers/workers - Powerloom weavers from low level of technology have to be exposed to other areas of higher level technology with a view to improve their limited knowledge and also to produce diversified textile products or value added fabrics

Spinning Sector

• Area of cultivation of cotton in the State has to be increased and cultivation of Extra Long Staple cotton production need to be encouraged besides initiating efforts to increase the yield of cotton, so as to meet the domestic requirement of atleast 25 lakh bales per annum

• Cotton Development Board at State level shall be constituted for development of cotton, Research and Development activities on cotton, price stabilization activities, improved management, policy formulation etc.

• Market Committee Fee levied on cotton sale shall be rationalized for cotton development

• Almost 99 percent of ginning industry in the State remains primitive. Hence, modernization of ginning sector need to be encouraged

• Diversification of raw material from cotton to manmade fibre shall be encouraged

• Technology Upgradation Fund Scheme (TUFS), the flagship scheme for the Textiles industry certainly needs to be continued in the Twelfth Plan to attract large scale investments

• Focus of the assistances to be provided on investments in spinning sector shall be on modernization of existing units in addition to promotion of Greenfield projects

• Working Capital assistance provided to the spinning sector shall be continued with added benefits. The Margin Money required to avail the assistance will be reduced from 25 percent to 10 percent and the credit limit will be increased from 3 months to 6 months

• To encourage purchasing cotton cone yarn domestically within the State, the present levy of 5 percent VAT on cotton cone yarn shall be reduced to 2 percent VAT on par with 2 percent CST levied on inter-state purchases

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• Scheme for Integrated Textile Parks (SITP) needs to be continued in the Twelfth Plan for development of projects in Textile Clusters. In addition, the State Government will provide financial assistance to the Textile Parks under SITP, to the extent of 9 percent of project cost, subject to a ceiling of `9 crore, so as to encourage textile entrepreneurs to come forward to setup their units in Tamil Nadu

• Mutually conducive Labour laws needs to be enacted separately for spinning sector

• Uninterrupted quality power at competitive price need to be ensured. In addition, generation of power from non-conventional energy sources like Wind Power, Solar Power etc., needs to be encouraged

• Centres of Excellence (COE) shall be created in specific textile clusters in the State on PPP model covering textile trades from basic level to managerial level and target to train 1 lakh persons every year

• Untapped potential for technical textiles shall be exploited and assistances shall be provided for making investments on Technical Textile Units in the State

• High level advisory committee shall be constituted for textile industry at State level to discuss various issues and for the development of the industry

Processing Sector

• In order to fulfill the value chain by processing the yarn and fabric indigenously, a modern process house need to be installed with `90 crore investment with processing capacity of 1 lakh square metres per day

• Setting up of new textile processing facilities in coastal areas need to be encouraged to make the projects techno commercially viable and also avoid pollution problems

• The State Government shall provide financial assistance to the Textile Parks under SITP, to the extent of 9 percent of project cost, subject to a ceiling of ̀ 9 crore,

so as to encourage processing units as part of Textile Parks. Scheme for Integrated Textile Parks (SITP) to be continued in the Twelfth Plan for development of projects in Textile Clusters

• Marine Discharge Project which was approved in the Eleventh Plan with 25 percent Central share, 15 percent State share and the remaining by industry, aiming at a permanent solution for disposal of textile effluents needs to be implemented in the Twelfth Plan

• Uninterrupted power supply at reasonable rates needs to be ensured


The main objective of the Twelfth Five Year Plan is harmonious growth of handlooms, power looms and textile sectors with specific focus on handlooms by promoting the socio-economic conditions of the handloom weavers and other workers who form the backbone of the industry. The thrust areas are:

• Technology Upgradation

• Product Diversification and Design Intervention

• Skill Upgradation

• Enhancement of Productivity

• Promotion of exports

• Maximising Employment Opportunities

Strategies

• Technological Upgradation to improve the productivity and develop the infrastructure in all areas, especially mills, powerlooms, pre-loom and post-loom processing

• Developing powerloom clusters in the State, as centres of excellence with technological upgradation of the looms

• Training in modern management and production techniques, maintenance of modern machinery, dyeing practices, marketing of products, etc.

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• Arrangements with technical institutions to impart training to labour and technical manpower required for textile industry

• Modernize the handlooms and functional co-operative spinning mills and improve the skill of weavers and development of new designs

Key Initiatives

Modernisation and Technology Upgradation

Technology upgradation of handlooms would be undertaken with the help of institutions like South India Textile Research Association (SITRA), Indian Institute of Handloom Technology (IIHT), Weavers Service Centre (WSC) etc., for incorporating elements of loom technology, pre-loom and post-loom process such as dyeing, sizing, yarn preparation for handlooms, etc., as a time bound programme, to enable to achieve higher productivity, quality, wage earning capacity, etc.

Modernisation of looms (conversion of ordinary loom to pedal loom), preloom and postloom process, finishing and effluent plants needs to be taken up.

Product Diversification and Design Intervention

Product diversification will be accorded priority to sustain and to enhance the market share. Production of niche handloom goods will be encouraged to augment handloom exports. Concerted efforts will be made to infuse design development to suit the market requirements in association with premier institutions like National Institute of Design (NID), National Institute of Fashion Technology (NIFT), and National Council of Textile Design (NCTD). Services of the domestic and international designers will also be utilized to improve designs and products as per the taste of customers. It is proposed to develop 5000 new designs under Twelfth Five Year Plan.

Skill Upgradation

The State Government would setup a training centre to upgrade weavers’ skill to meet the challenges ahead, by providing multi-level training in weaving, design development and processing including dyeing in collaboration with the industry and the Government of India. The training would be imparted on various technical aspects relating to i) design development, ii) weaving techniques, iii) dyeing and printing, iv) pre and post loom operations and v) managerial skills.

Infrastructure for Production and Marketing Activities

The State Government would support development of Common Facility Centre at weaving clusters by providing mechanized pirn winding, additional attachments to looms, sectional warping, and knotting, folding and packing activities to facilitate bulk production with the assistance of Government of India. Institutional support from Handloom Export Promotion Council will also be availed for assessment of demand for handloom products in the international market.

Export Promotion

With a view of encouraging handloom exports, the Government will support conducting of buyer-seller meets, participation in fairs by Co-optex, Weavers Cooperative Societies and individual exporters within and outside the country with the assistance of Ministry of Textiles, Government of India. The development of clusters will be promoted as export zones in the areas where the handloom weavers are concentrated, so as to undertake the exportable varieties to improve marketing and to earn better wages.

Awareness Programme

It is felt necessary to promote and popularize the handloom schemes and

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components by way of workshops/ seminars/ buyer-seller meets/ publicity campaigns through print and electronic media etc., so that the benefits of the schemes/components reach the weavers.

Schemes for Twelfth Five Year Plan

Free Distribution of Sarees and Dhoties Scheme

The Scheme of Free distribution of sarees and dhoties to the people living below poverty line in rural and urban areas is being implemented by the State Government on the eve of Pongal festival every year. The scheme not only provides continuous employment to about 13,000 handloom weavers and 41,000 powerloom weavers, but also fulfills the clothing needs of 3.40 crore poor people in Tamil Nadu. Towards implementation of Free Distribution of Sarees and Dhothies Scheme, an outlay of `1841.25 crore is proposed in the Twelfth Five Year Plan period.

Sanction of Interest Subsidy

The Primary Weavers’ Cooperative Societies obtain working capital assistance through District Central Cooperative Banks under NABARD refinance scheme. This scheme is implemented to reduce the interest burden of the Primary Weavers’ Co operative Societies and to provide continuous employment to handloom weavers. Under this scheme, 4 percent interest subsidy is reimbursed on the rates charged by District Central Co-operative Banks to the Primary Weavers’ Co-operative societies by Government on quarterly basis whenever the Handloom Weavers’ Cooperative Societies avail cash credit loan.

In view of above, for the survival of the Handloom Weavers’ Co-operative Societies and for providing continuous employment, the continuance of the interest subsidy scheme becomes essential. Hence, this will be continued during the Twelfth Five Year Plan period with total outlay of `65.75 crore.

Rebate Subsidy Scheme

The State Government is providing subsidy towards rebate to promote the sale of handloom cloth. It permitted the primary weavers’ co-operative societies and Co-optex to allow rebate at the rate of 20 percent for the sale of handloom cloth throughout the year for the retail and wholesale sales, subject to the limitation of 20 percent or `100 per unit for cotton varieties and 20 percent or `200 per unit for silk varieties whichever is less. Towards implementation of Rebate Subsidy Scheme, a total outlay of `300 crore will be included in the Twelfth Plan period.

Integrated Handloom Development Scheme

Integrated Handloom Development Scheme aims at facilitating sustainable development of handloom weavers located in identified handloom clusters into a cohesive, self managing and competitive socio-economic units and the major components under this scheme are Cluster Development Programme, Group Approach for development of handlooms and marketing incentive with Handloom Weavers Co-operative Societies. This scheme is implemented as centrally shared scheme during the Eleventh Five Year Plan and will be continued during the Twelfth Five Year Plan period.

a) Cluster Development Programme

The Cluster Development Programme approach focuses on formation of weavers’ as a group to enable them achieve self sustainability. Under this scheme, to develop the handloom clusters possessing 300 to 500 looms, financial assistance up to `60 lakh is being provided for each cluster over a period of 3 years. Financial assistance under this scheme is provided for various components, such as Skill Upgradation, Purchase of New looms and accessories, setting up of dyeing units, Common Facility Centres, opening of showrooms, conducting exhibitions / fairs, publicity, providing of design inputs etc.

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Both the Central and the State Government provide financial assistance under this scheme on sharing basis.

Under this scheme, so far 52 Handloom Clusters have been sanctioned for the State, over 7 phases, at a total project cost of `34.82 crore, which includes a subsidy of `31.76 crore from the Central Govt and `2.49 crore from the State Government and the beneficiaries’ contribution being `0.57 crore.

Towards implementation of Cluster Development Programme under Integrated Handloom Development Scheme, a total outlay of `22.30 crore is proposed under the Twelfth Plan.

b) Group Approach for Development of Handlooms

“Group Approach” component of Integrated Handloom Development Scheme envisages benefiting those Handloom Weavers, who are not covered under the clusters. A group should preferably have 10 (or) more weavers which can be in the form of Self Help Group / Primary Weavers Co-operative Society / individual weavers. Financial Assistance is provided under this scheme towards basic inputs like margin money, purchase of new looms, dobby, jacquard and accessories, skill upgradation and construction of worksheds. This scheme is implemented for 2 year period with the Central and State Governments financial assistance.

Under this scheme, the Government of India have sanctioned 271 Group Approach Projects for Tamil Nadu at a total project cost of `19.15 crore which includes a subsidy of `14.46 crore from the Central and `3.45 crore from the State Government. The beneficiaries’ contribution is `1.24 crore. Among the 271 Group Approach Projects, 119 projects at a cost of `10.28 crore have so far been completed and the remaining project are under progress. Under this scheme, 13,621 weavers are deriving the benefits.

Towards implementation of Group Approach Programme under Integrated Handloom Development Scheme, a total outlay of `22.30 crore is proposed under the Twelfth Plan under shared scheme.

c) Marketing Incentive

The State Government permitted the primary weavers’ co-operative societies and Co-optex to allow rebate at the rate of 20 percent for the sale of handloom cloth throughout the year for the retail and wholesale sales, subject to the limitation of 20 percent or `100 per unit for cotton varieties and 20 percent or `200 per unit for silk varieties whichever is less. The excess expenditure over and above the Government of India’s contribution under Rebate Subsidy scheme will be borne by the State Government. Towards implementation of Marketing Incentive under Integrated Handloom Development Scheme, a total outlay of `200 crore will be included in the Twelfth Five Year Plan under shared scheme.

Co-operative Handloom Weavers’ Savings and Security Scheme

Under this scheme, a weaver member in the weavers co-operative society contributes eight paise per rupee of wages earned and the State Government is contributing four paise per rupee of wages as matching share. Accordingly, total subscription of 12 paise is being deposited in the Government Account. Under this scheme, 78981 weaver members were enrolled so far. Towards implementation of Co-operative Handloom Weavers Savings and Security Scheme, a total outlay of `25 crore will be included in the Twelfth Five Year Plan period .

Tamil Nadu Co-operative Handloom Weavers’ Old Age Pension and Family Pension Scheme

Old Age Pension payable to the handloom weavers who have attained the age of 60 years is `400/-. Under this scheme, 17404 handloom weavers are getting Old Age Pension. In the event of death of members of

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Weavers Co-operative Society before attaining the age of 60 years, the family pension of `550/- will be paid to the nominee of deceased weavers for a period of 10 years or upto the age of 60 years (if deceased weavers would have been alive) whichever is beneficial to the weaver’s family. 1399 weaver beneficiaries are getting family pension under this scheme.

The Government of Tamil Nadu has ordered enhancing the pension payable under the Tamil Nadu Co-operative Handloom Weavers Old Age Pension Scheme from `400 to `1,000 per month and Tamil Nadu Co-operative Handloom Weavers Family Pension Scheme from ̀ 550 to ̀ 1,000 per month. This enhancement order would benefit 18,646 Handloom Weavers under the Old Age Pension Scheme and 1,549 weaver families under the Family Pension Scheme.

Towards implementation of Co-operative Handloom Weavers Old Age Pension and Family Pension Scheme, a total outlay of `95 crore will be included in the Twelfth Five Year Plan period.

Mahatma Gandhi Bunker Bima Yojana Scheme

Under the Mahatma Gandhi Bunkar Bima Yojana Scheme, the total premium to be paid to Life Insurance Corporation would be `330 per weaver/ per annum, of which, `150/- will be contributed by the Government of India, `100 will be contributed by Life Insurance Corporation of India and `80/- being the weaver contribution will be paid by the State Government on behalf of the weavers.

The insurance amount payable to the handloom weavers enrolled under the Bunkar Bima Yojana Scheme is given in Table 8.5.3

Towards payment of premium on behalf of handloom weavers under Mahathma Gandhi Bunkar Bima Yojana Scheme, a total outlay of `11crore as State share will be included in the Twelfth Five Year Plan period.

Table 8.5.3: Insurance Amount payable to Handloom Weavers

(in `)

S.No. Category Amount

1 For Natural Death

60000

2 For Accidental Death

150000

3 For Total Disability

50000

4 For Partial Disability

75000

Source: Working Group Report , HHTK Department.

Health Insurance Scheme For Handloom Weavers

The Government of India has introduced a New Health Insurance Scheme for Handloom Weavers from the year 2005-06 in the place of the existing Health Package Scheme for Handloom Weavers. Under this scheme, the Government of India will pay `800 and the State Government will pay ̀ 200 per weaver per annum on behalf of weavers. Under this Scheme, each weaver family will be entitled to medical assistance for a maximum of `15,000 per annum.

Towards payment of premium by the State Government on behalf of Handloom Weavers under Health Insurance Scheme, a total outlay of `26 crore will be included in the Twelfth Five Year Plan period.

Modernisation & Technology Upgradation of Pedal looms

The objective of providing pedal loom is to use better technology for the looms which enhances the production, reduces fatigue and increases the level of income of

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the weaver, to overcome the constraints faced by the weavers and to galvanize them to higher productivity. It is proposed to upgrade ordinary powerlooms with the attachments like warp stop motion, electronic weft stip motion and positive let-off motion. An outlay of `7.50 crore is earmarked for the Twelfth Plan.

Technology Upgradation Fund Scheme (TUFS)

TUF scheme has been introduced in order to up-grade the technology in the areas of pre-loom, weaving, post-loom etc. with a focus on the overall improvement in quality of the products for niche market, productivity and level of earnings of the Handloom weavers.

The Scheme mainly provides for reimbursement of 5 percent interest charged by the financial institutions/banks for technology upgradation projects. 25 percent capital subsidy for the Handloom Sector will be provided on purchase of new machinery and equipments for the pre- loom & post-loom operations, up-gradation of handlooms and testing & Quality Control equipments for exclusive use by the handloom production units. The scheme envisages boosting large scale investment in hi-tech spinning units, by providing 4 percent interest reimbursement on TUFS loans. The Scheme provides 5 percentinterest reimbursement plus 10 percent capital subsidy for specified processing machinery.

Scheme for Integrated Textile Parks (SITP)

In order to develop textile clusters in an integrated approach, the Scheme for Integrated Textiles Parks (SITP) is being implemented by the Government of India. Under this scheme, textile parks with all infrastructural facilities including state-of-art effluent treatment plants are encouraged. Setting up of New Textile Park in the State will develop the State Textile Industry. It would increase direct investment and generate

additional employment opportunities and 9 percent of the project cost of each project to a maximum of `9 crore will be provided as grant by the State Government to all the Textile Parks to be set up in Tamil Nadu under this scheme. It would help to generate employment both in rural and semi-urban. During the year 2011-2012, the Government of India accorded approval for establishment of two New Textile Parks in Tamil Nadu, one at Bagalure in Krishnagiri district at a project cost of `126.20 crore and another at Pallavada, in Tiruvallur district at a project cost of `117.08 crore.

Common Effluent Treatment Plants & Marine Discharge Project

Common Effluent Treatment Plants (CETP) have been established to treat the effluents being let out by the dyeing units in Tiruppur area, in order to protect the environment and also meet international pollution norms. In order to assist the Tiruppur Processing industries by reducing the financial burden in setting up of CETPs, the Government of India and the Government of Tamil Nadu have sanctioned `320 crore (Government of India share of `200 crore plus Government of Tamil Nadu share of `120 crore) as grants to 18 CETPs of Tiruppur. This would help in installing latest technology enabling the CETPs to achieve zero liquid discharge level. The State needs to adopt either Nano technology or Brine re-use technology to achieve zero discharge of effluents and for achieving zero liquid discharge.

Further, as a permanent solution for the effluent discharge from bleaching/ dyeing/processing units, a Marine Discharge Project has been announced in the Eleventh Plan at a project cost of `750 crore with central share of 25 percent, state share of 15 percent and balance by private participation. This project aims at carrying the treated effluents discharged from processing/dyeing units in Tiruppur, Erode, Karur etc., through a pipeline upto the sea for marine disposal.

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Revival, Reform and Restructuring Package for Handloom Sector

The State Government will participate in the “Revival, Reform and Restructuring Package for Handloom Sector” implemented as a shared scheme between the Central and State Governments. Co-operative societies, individual weavers, self help groups and joint liability groups which have taken loans for weaving purposes will benefited. Under this scheme, the societies in our State will get a package support and 962 Weavers Co-operative Societies will get benefitted in the State. The National Bank for Agriculture and Rural Development (NABARD) will act as a Nodal Agency, for implementation of the scheme and Memorandum of Understanding will be entered with Government of India and NABARD, by the State Government.

Centrally Sponsored Schemes

Re-Introduction of Central Thrift Fund Scheme

Under the Scheme of Central Thrift Fund, each weaver of the Weavers’ Co-operative Society contributes eight paise per rupee of wages earned, the State Government is contributing four paise per rupee of wages and the Government of India contributes

four paise per rupee under the Central Thrift Fund Scheme.

The Government of India has discontinued the Central Thrift Fund Scheme from 01.04.2007. However, the State Government is still continuing the scheme by contributing State Government share of 4 percent. Consequent on the discontinuance of the central share, the Central Share of 4 percent which was hitherto availed by the weavers has been stopped. Hence, to benefit the weavers and safeguard their interest, the Central Thrift Fund Scheme needs to be re-introduced with GoI financial assistance, for which on outlay of `20 crore is proposed during Twelfth Five Year Plan period.

Continuance of 10 percent Special Rebate Scheme under Twelfth Five Year Plan

In order to augment marketing of handloom products particularly in the wake of stiff competition with textile products of powerloom and mill sectors, the Government of India had implemented 10 percent special rebate scheme for a period of 3 years from 2006-07 to 2008-09. As per guidelines of the Government of India, the calendar of festivals to implement the scheme as shown in Table 8.5.4.

In addition to the festivals, the State Government shall have the option to extend the benefit of this scheme for a period not exceeding a total of 7 days. The 10 percent Special Rebate Scheme has not been implemented by the Government of India after 01.04.2009. With the continuance of this scheme, the handloom sector will be able to market handloom products and reduce the accumulated stocks, the GOI will continue the scheme in the Twelfth Five Year Plan period with an outlay of `50 crore.

Fig.8.5.1: Revival of Spinning units

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Table 8.5.4: Calendar of festivals for Special Rebate Scheme

S.No. Name of the Festival No. of days

1 Mahavir Jayanti & Good Friday 9

2 Milad-un-Nabi (Birthday of Prophet Mohammad) and Budha Purnima

9

3 Rath Yatra 9

4 Independence Day / Ganesh Chaturdashi /Parsi New Year / Onam / Raksha Bandhan

20

5 Gandhi Jayanti / Dussehra / Durga Puja / Deepawali / Bhai Duj and Id-Ul-Fitr

45

6 Christmas / Makar Sankranti / Magh Bihu / Pongal 26

7 Holi

10

Total 128

Source: Working Group Report,HHTK Dept.,GoTN

Twelfth Five Year Plan Outlay

An outlay of `2692.11 crore is earmarked for the State schemes for Handloom and Textiles Sector and

`1626.30 crore for Centrallly Sponsored schemes for the Twelfth Plan. The details of Twelfth Plan outlay are shown in Table 8.5.5.

Fig.8.5.2: Textile Products

382


Table 8.5.5: Twelfth Plan Outlay - Handlooms and Textiles(` crore)

S.No. Name of the Scheme Outlay

I Ongoing scheme

State Schemes1 Free Distribution of Sarees and Dhoties Scheme (including

SCSP and TSP)1841.25

2 Sanction of Interest Subsidy 65.75

3 Rebate Subsidy Scheme 300.00

4 Co-operative Handloom Weavers Savings and Security Scheme 25.00

5 Insurance Scheme for Handloom Weavers(Mahathma Gandhi Bunker Bima Yojana Scheme)

11.00

6 Health Insurance Scheme for Handloom Weavers 26.007 Tamil Nadu Co-operative Old Age Pension Scheme and Family

Pension Scheme 95.00

Total State Schemes 2364.00Shared Schemes (State share)

8 Cluster Development Programme 22.30

9 Group Approach for Development of Handloom 22.30

10 Marketing Incentive 200.00

Total Shared Scheme (State Share) 244.60Total ongoing schemes 2608.60

II New Schemes11 Market Promotion Activities 10.00

12 Research and Development activities 10.00

13 Modernisation & Technology Upgradation-Supply of Pedal looms (New)

7.50

14 Assistance for Powerlooms

a)Upgrading of existing looms 50.00

b)Machinery Development 0.10

c)Captive Power Plants 2.00

d) Market Interaction Centre 1.25

e) Skill Development 2.25

f)Insurance scheme 0.20

g) Exposure visit 0.15

h) Financial Assistance to Erode Powerloom Service centre 0.06

Total New Schemes 83.51Grand Total –Handlooms & Textiles 2692.11

383383


The monitorable targets relating to Handlooms & Textiles sector in the Twelfth Plan are shown in Table 8.5.6.

Table 8.5.6: Monitorable Targets in Handlooms and Textiles Sector

S.No. Schemes Target

1 Free Distribution of Sarees and Dhoties Scheme

a) No. of Sarees to be produced (units in crore) 8.50

b) No. of Dhoties to be produced (units in crore) 8.50

2 Co-operative Handloom Weavers Savings and Security Scheme - Enrolment of Weavers (Additional)

30000

3 Health Insurance Scheme (Additional Enrolment of Weavers) 4000

4 Implementation of Handloom Reservation Act (No.of Powerlooms to be inspected)

250000

5 Design Development (No.of New Designs) 5000

6 Supply of New Looms (No.of Looms) 5000

7 Upgradation of Looms (No. of Looms) 10000

384


ANNEXURE 8.3.1MSE-CDP Grant on Cluster during Twelfth Plan

(` crore)S. No. Cluster Name Project

cost of CFC

GoI grant proposed

GoTN Share

proposed

SPV Bank Term Loan

Financial year 2012-13

1 Rice Mill Cluster, Alangulam 7.89 5.52 0.79 0.84 0.74

2 Plastic Cluster, Madurai 5.24 3.43 0.33 0.73 0.75

3 MICAL Pharma, Chennai 3.43 2.66 0.34 0.42 0.00

4 Engg. Cluster, Ambattur 5.51 4.38 0.54 0.59 0.00

5 Engineering cluster, Dindigul 9.71 6.51 0.97 1.33 0.90

6 Engg. Cluster, Perungudi 0.77 0.60 0.07 0.06 0.04

7 Engg. Cluster, Parmakudi 2.33 1.33 0.23 0.38 0.39

8 Stainless Steel Vessels , Kumbakonam 1.27 0.99 0.08 0.20 0.00

Sub Total 36.15 25.42 3.35 4.55 2.82

Financial year 2013-14

9 Pharma Indian Systerm of Medicine, Kavangarai 0.47 0.36 0.05 0.07 0.00

10 Refractory Cluster, Virddhachalam 8.99 5.74 0.90 1.35 1.00

11 Rice Mill Cluster, Kangeyam 7.51 5.25 0.75 0.95 0.55

12 Rice Mill Cluster, Thanjavur 2.34 1.17 0.40 0.24 0.53

13 Printing Cluster, Krishnagiri 10.84 9.75 0.00 1.08 0.00

14 Chennai Plastic Sacks Cluster, Kancheepuram 10.85 10.27 1.00 2.58 1.00

15 Coir cluster, Erode 6.00 4.12 0.49 0.60 0.79

16 Lorry Body Building, Namakkal 14.74 11.07 0.99 2.33 0.35

Sub Total 61.74 47.73 4.58 9.20 4.22

385385


ANNEXURE 8.3.1 (Contd.)

MSE-CDP Grant on Cluster during Twelfth Plan (` crore)

S. No. Cluster Name Project cost of CFC

GoI grant proposed

GoTN Share

proposed

SPV Bank Term Loan

Financial year 2014-1517 Electronic Product Cluster,

Coimbatore14.82 10.37 1.00 1.97 1.47

18 Auto and Power Loom Cluster, Rasipuram

14.96 10.32 1.10 1.67 1.87

19 Power Loom, Rasipuram 5.51 3.72 0.46 0.59 0.74

20 Cement Pipes, Chinnadharapuram

10.10 6.43 3.37 0.30 0.00

21 Gold Jewellery, Madurai 3.61 2.61 0.29 0.40 0.32

22 Gate & Grill, Thirumullaivoyal

2.97 2.10 0.30 0.57 0.00

23 Lime Cluster, Tirunelveli 4.89 3.44 0.00 1.46 0.00

Sub Total 56.86 38.99 6.52 6.96 4.40Financial year 2015-16

24 Pharma Cluster, Alathur 10.00 7.00 1.00 0.50 1.0025 Corrugated Boxes Cluster,

Tiruvallur15.50 9.03 2.58 1.93 1.96

26 Leather Madhavaram27 Trichy Gold Jewellery

Cluster, Trichy28 Sidda Cluster, Madurai 24.50 18.97 1.42 3.57 1.0429 Woollen Sweater Cluster,

ooty and other new projects

Sub Total 50.00 35.00 5.00 6.00 4.00

Financial year 2016-1731 Readymade Garment

cluster, Thalavaipuram

50.00 35.00 5.00 6.00 4.00

32 Rubber, Madurai

33 Rice Mill cluster, Tuticorin

34 Rice Mill cluster, Tiruchendur

35 Other New Projects

Sub Total 50.00 35.00 5.00 6.00 4.00

Grant Total 254.75 182.14 24.45 32.71 19.44

386


ANNEXURE 8.3.2MSE-CDP grant on Creation of New Industrial Estates during Twelfth Plan

(` crore)

S.No.

Name of the Proposed Indl.Estate / ID Centre

Name of the District

Extent in Acres

Proposed Dev.Cost

Govt. of India

Grant 60% on Project

cost. Financial Year 2012-13

1 Chengarai Thiruvallur 43.11 3.90 2.342 Sathanoor (Including 100 KW

Solar Power Plant)Villupuram 215 20.85 6.00

3 Kurukkalpatti Tirunelveli 98.76 8.90 5.344 Allalacheri and Nagaleri Vellore 40 3.60 2.16

Sub Total 396.87 37.25 15.84Financial Year 2013-14

5 Pattanam Villupuram 88.34 8.90 5.34

6 Myleripalayam Coimbatore 22.23 2.50 1.507 Idayakottai(Including 100KW

Solar Power Plant)Dindigul 116.55 13.00 6.00

8 Ponnakudi Tirunelveli 96.9 9.70 5.82Sub Total 324.02 34.10 18.66Financial Year 2014-15

9 Asanur (Phase-II) Villupuram 143.94 15.83 6.0010 Thandarai Kancheepuram 40.86 4.50 2.7011 Sedapatti Madurai 51 5.60 3.3612 Chathrapatti Virudhunagar 60 6.60 3.96


13 Polur Thiruvannamalai 60.66 7.30 4.38

14 Manavasi Karur 121.58 14.60 8.75


15 Nerur Vadapagam Karur 59.89 7.80 4.68

16 Sangagiri Salem 53.52 7.00 4.20

Sub Total 113.41 14.80 8.88

MSE-CDP Grant from Govt.of India proposed in 12th Five year plan period @ 60% of the proposed Development Cost

1312.34 140.58 72.53

387387


ANNEXURE 8.3.3Upgradation of SIDCO industrial estates under MSE- CDP programme

(` crore)S.

No.Name of the

Proposed Indl.

Estate / ID Centre

Name of the

District

Extent in

Acres

Proposed Dev.Cost

GoI Grant

60% on Project

cost

GoTN. of Grant 30% on Project

cost

Beneficiary

Contribution

(10%)

Financial Year 2012-131 Vichoor Thiruvallur 59.16 5.00 3.00 1.50 0.50

2 Thiuverambur (Including 100KW Solar Power Plant)

Trichy 74.54 5.20 3.12 1.56 0.52

3 Malumichampatty

Coimbatore 36.14 2.00 1.20 0.60 0.20

4 Nanjikkottai Thanjavur 26.32 1.55 0.93 0.46 0.15

5 Keelanagachi Ramanathapuram 10 0.50 0.30 0.15 0.05

Sub Total 206.16 14.25 8.55 4.27 1.42 Financial Year 2013-14 6 Rajapalayam Virudhunagar 41.13 2.00 1.20 0.60 0.20

7 Madurai Madurai 56.054 2.25 1.35 0.67 0.228 Dindugal Dindigul 39.902 2.00 1.20 0.60 0.209 Thuvakkudy

(Phase II ) (Including Solar Power Plant)

Trichy 159.46 8.50 5.10 2.55 0.85

Sub Total 296.546 14.75 8.85 4.42 1.47

Financial Year 2014-15 10 Thuvakkudy

(Phase-III)Trichy 159.46 7.00 4.20 2.10 0.70

11 Tiruppur Tiruppur 10.14 0.60 0.36 0.18 0.0612 Kadayanallur Tirunelveli 10 0.60 0.36 0.18 0.0613 Ranipet Vellore 113.44 6.75 4.05 2.02 0.67 Sub Total 293.04 14.95 8.97 4.48 1.49 Financial Year 2015-16 14 Thoothukudi ThoothuKudi 9.72 0.60 0.36 0.20 0.0615 Hosur(New) Krishnagiri 18.8 1.25 0.75 0.37 0.12

Sub Total 28.52 1.85 1.11 0.57 0.18

388


ANNEXURE-C (Contd.)Upgradation of SIDCO industrial estates under MSE- CDP programme

S.No.

Name of the Proposed

Indl.Estate / ID

Centre

Name of the

District

Extent in

Acres

Proposed Dev.Cost

GoI Grant 60% on

Project cost

GoTN. of Grant 30% on Project

cost

Beneficiary

Contribution

(10%)

16 Kumbakonam Thanjavur 0.32 2.25 1.35 0.67 0.22

17 Gudimangalam Tiruppur 0.06 0.50 0.30 0.15 0.05

Sub Total 0.38 2.75 1.65 0.82 0.27

Grand Total 824.646 48.55 29.13 14.56 4.85

Documents

Industries and Minerals - State Planning Commission - Tamil Nadu