Technology Upgradation of Clusters under NBCFDC Scheme

The National Backward Classes Finance and Development Corporation (NBCFDC) which is formulated under the Ministry of Social Justice and Empowerment serves for the welfare of Backward Classes. Under this scheme, NBCFDC aims to assist the members of the target group (backward classes) of the clusters by technology upgradation for efficient management of production unit. In this article, we look at the Technology Upgradation of Clusters under NBCFDC Scheme in detail. Also read, Skill Development Training Scheme of NBCFDC

Overview of Cluster

The cluster refers to a group of enterprises located within an identifiable and mostly practicable, contagious area, producing similar products or services. Enterprises in a cluster are substantially identical in their methods of production, quality control and testing, energy consumption, pollution control, etc. They use similar levels of technology, marketing strategies/practices and follow common challenges and opportunities among the members of the cluster.

Objectives

The objectives of Technology Upgradation of Clusters under NBCFDC scheme are as follows:

To provide or facilitate technological up-gradation to the members of target groups of the clusters identified and or developed by NBCFDC.
To improve the productivity and quality of the products being produced, services being rendered by the target groups (backward classes).
To enable the target group to face the competition in domestic and international markets.

Scope of the Scheme

The scheme was mainly developed for the expansion or modernisation of the existing unit. And for setting up of new units in the particular sectors such as bamboo, textile, carpet, pottery, jute, cane and other such cottage industries and small enterprises. Further artisans can also develop innovative tools to improve quality and productivity with the help of technical institutions and experts covered under the scheme. Note: The assistance provided will not overlap with any of the schemes offered by other Government of India to the identified clusters.

Eligibility Criteria for Target Group

The assistance will be provided to the target group who satisfy the following requirements.

The applicant should be a member of the clusters developed by NBCFDC or Channel Partners.
The applicant must belong to backward classes as notified by the Central and State Government.
The applicant family annual income should not be more than Rs.3 lakhs.

Note: The Self Help Groups (SHGs) participating under this scheme should consist of at least 60% of the persons belonging to the target group (backward class). And the remaining 40% should belong to the other weaker sections of society.

Quantum of Assistance

The assistance given by the NBCFDC for the development of cluster are tabulated below:

Purpose of Assistance	Scale of Assistance
For purchase of machinery/equipment with accessories for technology up-gradation and capacity augmentation with respect to the availability of funds, evidence for the sustainability of project etc.	Up to Rs.30,000 per beneficiary.
For entrepreneurship development and other specialized training.	Up to Rs.30,000 per beneficiary
For the development of common infrastructure or establishing of marketing linkages etc.	Up to Rs.6 lakhs per SHG (with a minimum of 10 members)

Pattern of Assistance

For Upgradation of technology

The NBCFDC will provide assistance at the rate of 90%, and the remaining 10% has to be contributed by the beneficiary.

For Capacity Augmentation

The NBCFDC will provide assistance at the rate of 100% to the beneficiaries.

For the development of common infrastructure

The NBCFDC will provide assistance at the rate of 80%, and the remaining 20% has to be contributed by the SHG. Note: In case of any administrative charges acquired as a part of the overall assistance of cluster development and further monitoring, the cost will also be reimbursed at the maximum rate of 5% of the project development cost to the implementing agency. In the case of entrepreneurship development training, there will not be any administrative costs allowed as the projects will be performed by the implementing agency.

Documents Required

The following are the documents to be produced for availing the assistance under the scheme.

List of the individual beneficiaries and the members of clusters along with SHG details including bank account details, activity details and present status of the machinery and current income.
Acceptance of terms and conditions of the sanction letter and constitution of the monitoring committee.
Copy of Project Completion Report has to be submitted by the Monitoring Committee.
A certificate of the GFR-17 norms for obtaining assets for technology upgradation and capacity augmentation of the members of clusters are required to be submitted
The estimated financial statement of the project, which includes administrative cost claimed by the agency to be enclosed.

Procedure for availing Assistance

All financial assistance will be distributed to the implementing agency. The eligible agency can obtain assistance under this scheme on submission of project proposal in the prescribed format as specified below :
- Demographics of the cluster identified or proposed beneficiary settlement.
- Present occupation and constraints faced.
- Proposed intervention details, along with the drawbacks of existing constraints.
- The outcome of the project, including the expected increase in sales or average daily earning of the artisans.
- Action plan for sustainability of the project.
A certificate of the GFR-17 norms for obtaining assets for technology upgradation and capacity augmentation of the members of clusters are required to be submitted.
The estimated financial statement of the project, which includes administrative cost claimed by the agency to be enclosed.
Also, Central or State Government Training Institutes who provide entrepreneurship development and other specialized training programmes to the trainees can acquire assistance as per norms or rates fixed by respective Central or State Government. In the case of customized courses, prices will be set as per the standards of the Ministry of Skill Development and Entrepreneurship.

Implementing Agency

The scheme will be implemented through Government Agencies, which is selected or shortlisted by the Corporation for cluster development or State Channelizing Agencies. And any other partners working under the Central State Government for the welfare of Backward Classes. Note: The implementing agency will cover 40% of female beneficiaries in physical and as well as financial terms.

Monitoring committee

A monitoring committee will consist of the following officers nominated by the NBCFDC:

Project Officer of the Agency
Officer of SCA of the concerned State
Head of the Finance or Chartered Accountant of implementing agency.
Officer from DIC
Official Consultant nominated by NBCFDC.

Disbursement of Funds by NBCFDC

The funds released in two instalments are explained in detail below:

To the extent of 70% of the funds will be released towards the first instalment after getting the following documents from the agency as given below:
- List of the individual beneficiaries and the members of clusters along with SHG details including bank account details, activity details and present status of the machinery and current income.
- Acceptance of terms and conditions of the sanction letter and constitution of the monitoring committee.
The remaining 30% of the fund will be released on producing the following documents.
Copy of Project Completion Report has to be submitted by the Monitoring Committee.
Certification of GFR-12A towards utilization certificate of the entire fund, within 3 months from the date of project completion, which may also be extended by NBCFDC.

Funds Utilization

The implementing agency will not obtain assistance for the similar training programme from any other Ministry or Department of India Government or State Governments.
The implementing agency will entrust the execution of the programme for which the grant is sanctioned to any other organizations or institutions.
The implementing agency will furnish to NBCFDC Quarterly Progress Reports (Performance-cum Achievement Report) on the project.
The implementing agency will maintain the subsidiary account for the grant and enclose the audited statement of accounts along with the utilization certificates (GFR-12A ) in the prescribed format duly signed by the Authorised Signatory of the Grantee Organization.
The accounts of implementing agency will be open to inspection by NBCFDC and its authorized representatives.
The assets created or obtained completely out of Government grant should not be used or encumbered other than the grant has been sanctioned without prior sanction of NBCFDC.
The implementation agency or SHG are supposed to prepare a Register of such assets and forward an annual statement in the prescribed format in GFR to NBCFDC at the end of the financial year.
If NBCFDC is not satisfied with the completion of the project, the implementing agency will be responsible for refunding the funds released by NBCFDC along with interest at the rate of 10 % per annum or as per rules of Government within one month from the date of the application.