The PM MITRA scheme is a government initiative to create world-class industrial infrastructure for the ₹ 12 trillion textile industry in India. The scheme is inspired by Prime Minister Narendra Modi’s 5F vision of Farm to Fibre to Factory to Fashion to Foreign.
The scheme was announced in October 2021 and the parks are expected to be set up by 2026-27. The total outlay for the project is ₹4,445 crore.
The seven states that will get PM MITRA parks are: Tamil Nadu (Virudhnagar), Telangana (Warangal), Gujarat (Navsari), Karnataka (Kalaburagi), Madhya Pradesh (Dhar), Uttar Pradesh (Lucknow), Maharashtra (Amravati).
The parks are located at sites that have the necessary linkages for the textile industry to flourish.
The parks will enable the textile industry to achieve higher size and scale along with the creation of a modern and integrated textile value chain at one location. The scheme is expected to attract large investments, including FDI, in the sector besides generating huge employment opportunities and making Indian companies become global champions.
Nearly ₹ 70,000 crore investment, with each park estimated to attract an investment of ₹ 10,000 crore, and two million employment generation is envisaged through these parks.
PM MITRA Park will be developed in a Public Private Partnership (PPP) based Master Developer (MD) model on Design-Build-Finance-Operate-Transfer (DBFOT) format.
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Objectives
- Create a modern industrial infrastructure
- Attract cutting-edge technology
- Boost FDI and local investment
- Generate direct and indirect employment
- Streamline the entire textile value chain from spinning to garment manufacturing in one location
- Reduce logistics costs
- Make India a global hub for textile manufacturing and exports.
Benefits
- Establishment of the PM MITRA Parks is a big leap for the industry, as the value chain is currently scattered across the country, which adds costs and delays in each link of the chain.
- To help scale operations, cut costs, improve efficiency, and supply high-quality textiles and apparel
- To increase free trade agreements (FTAs) that open up developed markets for Indian textiles, apparel, and several other sectors.
- The scheme will not just meet production efficiency and logistic efficiency, but also be a sustainable model as it significantly reduces the carbon footprint which the textile industry presently has because of the dispersed nature of the various segments — from fiber to garment.
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Two-stage selection process for PM Mitra parks
Stage 1 is for preliminary selection of potential sites offered by states wherein expenditure on constitution of Special Purpose Vehicles, planning of the park, and selection of master developer is done.
At Stage 2, sites will be ready for release of Grants in Aid for the construction of the park. The selection process for the PM MITRA Parks was validated by the innovative PM GatiShakti National Infrastructure Master Plan.
The states and sites were also evaluated using the ‘Challenge Method’ based on a set of criteria, including:
- Land: The site should have at least 1,000 acres of contiguous, encumbrance-free land
- Connectivity: The site should have good connectivity
- Distance to other facilities: The site’s distance to the nearest port, freight corridor, industrial corridor, or textiles cluster.
- Power and water: The site should have a reliable power supply and water availability
- Wastewater disposal: The site should have an effective wastewater disposal system
- State policy: The state should have a conducive and stable industrial or textile policy
- Textile sector strengths: The state should have traditional strengths in the textile sector
The other selection criteria for the parks included labor laws and single window clearances for all the regulatory approvals for land, building, electricity, CETP, and other common facilities.
The master developer selected for each PM MITRA park site will prepare the detailed project report/master plan of the PM MITRA Park. This Master Plan will be approved by the SPV.
The MD will prepare a detailed project report and master plan for the PM MITRA park. The master plan includes core infrastructure such as roads, drainage, sewage, solid waste management, treatment plants etc. to be developed, and will be approved by the SPV.
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Execution & Funding
PM MITRA park will be developed by a Special Purpose Vehicle (SPV) which will be owned by the State Government and Government of India in a Public Private Partnership (PPP) Mode.
The SPV, a legal entity with 51 per cent equity shareholding of the state government and 49 per cent of the central government, will be entitled to receive part of the lease rental from developed industrial sites and will be able to use that for further expansion of textiles industry in the area by expanding the PM MITRA Park, providing Skill Development initiatives and other welfare measures for workers.
For a Greenfield PM MITRA park, the GOI Development Capital Support will be 30% of the Project Cost, with a cap of ₹500 Cr. For Brownfield sites, after assessment, Development Capital Support @30% of project cost of balance infrastructure and other support facilities to be developed and restricted to a limit of Rs. 200 Crore. State Government supports will include provision of 1,000 acre land for development of a world class industrial estate.
A competitive incentive support (CIS) of up to Rs 300 crore per park to manufacturing units in PM MITRA shall also be provided to incentivise speedy implementation. The incentive can be provided to manufacturing units up to 3% of the total sales turnover on first come first serve basis.
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What is CIS?
CIS is a scheme under the PM MITRA programme that provides financial incentives to manufacturing units to establish themselves in PM MITRA parks. The CIS is designed to encourage early operationalization and quick scale up of manufacturing units in PM MITRA parks.
Why it appeals to MSMEs?
- Incentive amount: Up to Rs 300 crore per park
- How it’s provided: Up to 3% of the total sales turnover of the manufacturing unit
- Availability: On a first-come, first-served basis as the CIS is fund limited
- Eligibility: Only for manufacturing companies that are not availing benefits of the Production Linked Incentive (PLI)
- Incentive: It is up to 3% of the total sales turnover per year
- Caps: The caps are ₹10 crore per year for an investor company, and ₹30 crore for an anchor investor company with an investment of ₹300 crore or above in its unit in PM MITRA Park.
Convergence with other GOI schemes shall also be facilitated to ensure additional incentives to the Master Developer and investor units.
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Who can avail CIS?
CIS is available to manufacturing companies that are not receiving benefits from the Production Linked Incentive (PLI) under the Textile Scheme. The incentive is available until the funds provided for the PM MITRA Park are exhausted.
How much is available?
The amount of CIS available to each company depends on the size of its investment in the park:
- Anchor investor companies: A maximum of Rs 30 crore in incentives for companies investing Rs 300 crore or more
- Investor companies: A maximum of Rs 15 crore in incentives for companies investing Rs 100–300 crore
- Other investor and tenant companies: A maximum of Rs 3 crore in incentives for companies with at least 100 employees
There will be a cap of ₹1 crore per annum on incentive and a maximum cap of ₹3 crore on incentive for other investor companies and tenant companies, but they must have employment of 100 persons and above.
Project Approval Committee (PAC)
The proposals under the scheme will be approved by the Project Approval Committee, with the following composition:
- Secretary Textiles – Chairman
- Financial Advisor, Ministry of Textiles – Member
- AS/JS Ministry of Textiles – Member Convenor
- Representative of NITI Aayog – Member
- Representative of DPIIT – Member
The PAC will have the authority to approve the Detailed Project Report (DPR) and accordingly sanction projects; monitor the expenditure under DCS and CIS based on objective criteria. The PAC will also fine-tune the CIS policies such as linking benefits with investment and other objective parameters with the aim of the earliest operationalisation of the maximum number of units in PM MITRA Parks. PAC will have the final authority in the matters arising during the operation of the scheme. PAC will be assisted by a Project Management Agency.
Project Management Agency (PMA)
The PMA is responsible for the implementation and real-time monitoring of the PM MITRA Parks scheme. The PMA works with the Ministry of Textiles to:
- Prepare the project plan
- Create the business case and cost estimates
- Develop the implementation plan
- Attract investment
- Facilitate investment
- Monitor and evaluate the project
- Outreach to investors
The Ministry of Textiles selects the PMA through a Request for Proposal (RFP) on the GeM portal. The PMA examines the Preliminary Project Report and submits recommendations to the Project Approval Committee.
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Project Monitoring
The Ministry of Textiles will periodically monitor the progress of the projects under the scheme. The PMA will act as the technical support arm by providing secretarial, managerial and implementation support to the ministry for effective implementation of the scheme.
PMA eligibility criteria
To be eligible to work as a Project Management Agency (PMA) for the PM MITRA scheme, applicants must meet the following criteria:
- Have a master’s degree: Have at least 10 years of experience in advising state governments or central ministries on infrastructure projects
- Have experience in facilitating investments: Have experience in implementation of schemes for large industrial parks or infrastructure projects
- Have experience with state or central schemes to attract investments
- Have experience in the textile sector (desirable)
- MoT invites bids online through the GeM Portal
- PMA acts as the technical support arm for the MoT
PMA helps with the selection of sites, feasibility studies, and attracting investment.
Note:
Process for entrepreneurs to apply online under PM Mitra Scheme 2024 will be updated once information becomes available via official government websites. Watch this space for the latest updates on the PM Mitra Scheme.
