Blue and Pink Modern Tech Electronics and Technology Retractable Exhibition Banner

Mega Cluster

Mega cluster approach is a drive to scale up the infrastructural and production chain at Handicrafts clusters which have remained unorganized and have not kept pace with the modernization and development that has been taking place so far. 

Nature of Assistance:

  • Fiscal Incentives:

          Funds to the tune of 3% (max.) of project cost shall be earmarked for establishing baseline data/ DPR. 50% of the approved project cost will be released as advance. Second Installment @ 40% of the approved project cost will be released on utilization of 70% of 1st installment. The last 10% amount will be released as reimbursement on completion of project and submission of utilization report.

  • Non-Fiscal Incentives: 
    i. Employment Generation.
    ii. Better living standards for the existing artisans.
    iii. Foreign Exchange earnings by export.
    iv. Substantial increase in quality and value added production.
    v. Increase in the business of small entrepreneurs.
    vi. Savings in cost by manufacturers in the cluster due to better  infrastructure and Government induced benefits.
    vii. Revenue generation to local bodies and State & Central Governments.
    viii. Growth of industry in an organized form.

Comprehensive Scheme Guidelines for Development of Knitting & Knitwear Sector under Power Tax India - Textile scheme

1) Creation Of New Service In Knitting And Knitwear Cluster

Textile Objective:

Govt. of India will provide Textile scheme and their component of financial assistance for setting up of new knitting and knitwear service centers for providing testing, training, sample development, consultancy, trouble shooting, facilitation services in the Knitting and Knitwear clusters.

Financial assistance

:Textile Scheme of Financial Assistance up to Rs. 200 lakh per Center will be provided towards purchase of testing equipment and machineries required for training of the KSCs.

2) Yarn Bank Scheme:


To enable small Knitting and Knitwear textile units to purchase the yarn at wholesale rate and in large quantities by avoiding middle man/ local supplier’s charges by way of providing interest free corpus fund to Special Purpose Vehicle (SPV)/ consortium of Knitting and Knitwear sector unit.

Financial assistance:

Government scheme/ Textile scheme shall provide interest free corpus fund maximum up to Rs. 200 lakh per yarn bank to SPV/ Consortium.


The Members of SPV should be from Knitting and Knitwear sector and its allied industry unit, Co-operative Societies, Private Entrepreneurs and NGO’s working for Knitting and Knitwear sector.

3) Common facility Center scheme (CFC) for Knitting & Knitwear cluster 


The Common Facility Center will house design center/ studio, testing facilities, training center, information cum trade center and common raw material/ yarn/ sales depot, water treatment plant for industrial use, dormitory for workers, common pre-knitting facilities viz.

Quantum of Subsidy:

The Common Facility Center is entitled to the different levels of assistance from the Government on the basis of different grading of Knitting & Knitwear clusters i.e.

 Grade – A – subsidy upto 60% of the project cost. 

Grade – B – subsidy upto 70% of the project cost. 

Grade – C – subsidy upto 80% of the project cost. 

Grade – D & clusters in NER/ J&K – subsidy upto 90% of the project cost.

Assistance available for setting up of Common Facilities Centre including Yarn depot will be Rs. 400 lakh per CFC.

Eligible Project Cost:

Only 25% of the construction cost of the building will be eligible as subsidy subject to the maximum limit of Rs. 80 lakhs. The schedule of rates of CPWD as in the state shall be used as the basis for arriving at the cost estimates of construction of building.

Release of grant:

1st installment 30% within 90 days, 2nd installment 30% within 180 days, 3rd installment 40% within 270 days, and 4th installment representing 25%.

4) Scheme for Integrated Textile Parks (SITP)

Financial assistance:

The Government of India’s (GOI) support under the Scheme by way of  Grant or Equity will be limited to 40% of the project cost subject to a ceiling of Rs. 40 crore for parks. However, GOI support will be provided @90% of the project cost subject to a ceiling of Rs. 40 crore for first two projects in the hilly states.

Release of Funds:

1st installment representing 10%, 2nd installment representing 15%, 3rd installment representing 25%, 4th installment representing 25%.

5) Pradhan Mantri Credit scheme for Power loom Weavers



  • To provide financial assistance viz. Margin Money Subsidy and interest reimbursement as against the credit facility (term loan) availed under Pradhan Mantri Mudra Yojana (PMMY) to the decentralized powerloom units/ weavers.
  • Margin Money Subsidy as against the credit facility (term loan) availed under Stand-up India scheme by the SC, ST, & Women Entrepreneur of the decentralized powerloom units/ weavers to meet their credit requirements such as for investment needs (Term Loan) and for working.

Eligibility components:

Common Facility Centers (CFCs) for pre and post weaving process, Mini-Industrial Parks with Work sheds supported by Core Infrastructure, Innovative Ideas, and other need-based interventions.

Financial assistance:

  • Matching investment in the ratio of Government (60) : Private (40).
  • Government of India provides subsidy of 60% of the project cost with maximum ceiling upto Rs. 50 crore.

6) Credit Linked Capital Subsidy Scheme for Technology Up-grdation (CLCSS)  


The objective of the (CLCSS) textile Scheme is to facilitate technology up-gradation in MSEs by providing an upfront apital subsidy of 15 per cent (on institutional finance of upto Rs. 1 crore availed by them) for induction of well-established and improved technology in the specified 51 sub-sectors/ products approved. In other words the major objective is to upgrade their plant & machinery with state-of-the-art technology, with or without expansion and also for new MSEs which have set up their facilities with appropriate eligible and proven technology duly approved under scheme guidelines.

Financial Assistance:

The revised scheme aims at facilitating technology upgradation by providing 15% up front capital subsidy to MSEs upto Rs. 1 cr.

7) Modified Comprehensive Powerloom Cluster Development Scheme (MCPCDS)


  • To create world class infrastructure to integrate production chain, to fulfil the business needs of the local Small and Medium Enterprises (SMEs) and to boost production and export.
  • Development of infrastructure, common facilities, other need based innovations, technology upgradation and skill development.
  • Overcome the bottlenecks in infrastructure and common facilities in brownfield clusters.

(MCPCDS) Textile Eligibility Components:

Textile Common Facility Centres (CFCs) for pre and post weaving process, Mini-Industrial Parks with Worksheds supported by Core Infrastructure, Innovative Ideas, and other need-based interventions.