Govt clears Rs 243-crore coir project

The cabinet committee on economic affairs has approved a Rs 243-crore project for the development of the coir sector in the 11th Five Year Plan. This is the highest ever fund sanctioned by the Union government for the sector.

A C Jose, chairman, Coir Board, said that the scheme comprised two vital sectors "" the spinning segment which consists of 4,000 units and 3,200 units of the tiny and household segment. The projected employment that will be generated is of 60,800, of which 36,800 will be new employment.

The total term loan allocation for the sectors will be Rs 243 crore of which the grant content of the Centre will be Rs 99 crore.

A spinning unit will get a maximum financial assistance of Rs 200,000, including Rs 105,000 for machinery, Rs 75,000 for work shed and Rs 20,000 for tools and accessories while tiny/household units will be eligible for Rs 500,000 with Rs 300,000 for machinery.

The investment part of the beneficiary is limited to 5 per cent, while 40 per cent will be the central government grant and the rest 55 per cent will be provided as term loans.

Talking to Business Standard, the Coir Board Chairman said more than 50 per cent of the scheme would encompass Kerala, where 70 per cent of the coir manufacturing facility in India is situated.

Tamil Nadu, Karnataka, Andhra Pradesh, Orissa, North Eastern region and Andaman & Lakshadeep Islands are other areas which will be covered under the scheme.

The scheme envisages augmenting the machine capacity by replacing existing dilapidated machines with modern ones or putting up modern machinery with scale up technology for new units.

The infrastructure needs of the workers are taken care of by provision of funds for constructing work sheds for which amount has been set apart in the outlay.

In the tiny and household segment, weaving units, curled coir manufacturing units, coir mat finishing and processing units, coir rope manufacturing units, coir pith block making units, coir pith composting units and any other unit of the size of Rs 5 lakh will be covered.

For the effective implementation of the scheme, the board has set up an independent cell at the headquarters headed by a regional officer.

He added that for the current financial year, the board had planned to cover 350 spinners and 305 tiny/household units under the scheme with a total outlay of Rs 22.25 crore.

The finance minister had earlier earmarked Rs 25 crore as the government grant during the accounting year 2007-08.

But due to revision of budget estimates and as the implementation required various approvals, the grant outlay for the current financial year was reduced to Rs 9 crore as per the revised estimates. The total outlay for the operation of the scheme in 2007-08 was pegged at Rs 22.25 crore.