Common Facility Centre (CFC) Scheme

Common Facility Center (CFC) is a well-established phenomenon for promoting MSME clusters in India.
A number of Ministries of the Government of India including the Ministry of MSME, Ministry of Textiles,
Ministry of Food Processing Industries, Department for Promotion of Industry and Internal Trade,
Ministry of Environment and Forest, Ministry of Rural Development, various State Governments as well
as national and international organizations have been implementing schemes/programs for
establishment of CFCs in India. It is estimated that over 1000 CFCs are either in operation or in various
phases of development across the country. Around 600 of those are in operation for more than a year.
This study tries to understand the factors that create sustainable CFCs based on studying a sample of
12 CFCs in sectors like bamboo, coir, gold, handloom, foundry, plastics, printing, etc.

Objectives of the Scheme

To establish Common Facility Centres (CFC) in various Powerloom clusters
To provide pre-weaving, post weaving and other infrastructure facilities to Powerloom units, power loom weavers, power loom industry associations and other organizations allied with Powerloom industry.
It is but natural that the field study witnessed that while some of the CFCs are running successfully,
others are partially successful and yet others are not successful as of now. These CFCs are being
supported by a host of different schemes including MSECDP, SITP, SFURTI, Special Program, etc.
Objective of this study is to understand what are the factors that promote successful CFCs. These
lessons may pertain to conceptualization, design of CFCs, administrative processes for implementation
and determinants of post CFC impact. Hence, this study will not to declare name of the CFCs and the
corresponding scheme/program and instead highlight the learnings. This is more so as our visit for a
day to a CFC gives a tangential understanding to the entire story of the CFC and hence our
understandings can be partial too.

Eligibility Criteria

It is necessary to form a Special Purpose Vehicle (SPV) with a minimum of 11 members required to apply for the CFC scheme.
The Members of SPV should be Powerloom Weavers, Master Weavers, Co-operative Societies, Private Entrepreneurs, NGO’s working for Powerloom Sector.
The SPV registered under Companies Act, Co-operative societies, a trust, Limited Liabilities Partnership (LLP) Act, State Government/State Government Agencies are eligible for establishment CFC under the Scheme.
The SPV should possess their own Land/Building (or) Leased Land/Building registered in favour of SPV for a minimum period of 10 Years.

Operation of SPV

In addition to the members of the SPV, the organizers should obtain written commitments from the users of the proposed facility so that its benefits can be further enlarged.
The SPV must have a democratic constitution with an inbuilt scope for increasing the membership, including individual entrepreneurs or power loom weavers in future.
The SPV is required to interact with the weavers and tie-up with the connected organizations like financial institutions, banks, market experts/market institutions, marketers, legal experts, Government machinery etc.
•The SPV will prepare project report for setting up of the Common Facilities Centre/yarn depot, infrastructure etc. specifying the annual action plans and indicating the requirement of the cluster, activities and expected outputs, outcomes/deliverables time limit for completion of the projects.
The SPV is required to send the proposal in the prescribed formats along with documents enlisted in the checklist to the concerned Regional Office of the Textile Commissioner.
The Regional Office of the Textile Commissioner will examine the proposal and forward the same to the Office of the Textile Commissioner along with their recommendation within 30 days of the receipt of the proposal.
The Office of the Textile Commissioner will further verify the proposal and place the same before the Project Approval Committee (PAC) within 60 days of the receipt of the proposal from the concerned Regional Office of the Textile Commissioner.
The SPV will also submit physical and financial progress report periodically and also, completion report to the Textile Commissioner.
After completion of the projects, the SPV will continue as a consortium for the power loom weavers to run and maintain the common facilities/infrastructure.
The SPV is not supposed to charge the non-SPV members more than 20% of the charges they charge to their own SPV members towards the usage of Common Facility Centres since the Government of India subsidy is provided for the establishment of CFC.

Other Conditions

The proposals/projects more than one in a single cluster are allowed as per the requirement of the cluster without restricting the maximum subsidy limit per CFC. However, the SPVs of CFCs will not have any common Director, i.e., Director of one particular SPV of a CFC will not be a Director of any other SPV of CFC.
Owned Land/Building, Leased land/Building registered in favour of SPV for a minimum period of 10 Years is to be arranged by SPV before submitting the proposal for financial assistance from Government.
A minimum of 11 members is needed to form an SPV.
In case of any change in a project profile, the approval of PAC is to be obtained.
Only TUF compatible machinery are eligible to install in the CFC.
In case of non-utilization of subsidy and delay in completion of the project, as approved by PAC, funds released would be recovered from the Executive Agency with simple interest at the rate of 10% per annum and the decision of PAC will be the final.

Eligible Machines & Equipments

Common Facility Centre will include studio/design centre, testing facilities, training centre, information cum trade centre and common raw material/yarn/sales depot, water treatment plant for industrial use, the dormitory for workers/worker’s residential place, common pre-weaving facilities viz. Yarn dyeing, Warping & Sizing, Twisting etc. and post weaving facilities viz. Processing etc.

Also, there can be other tangible assets that would be set up in clusters, as long as they are put to common use by decentralized power loom units in and around the cluster.

Quantum of Subsidy

The assistance given by the Government for Common Facility Centers are tabulated below:

S. No	Project Cost	Scale of Assistance
1.	Machinery, plant, equipment, laboratory, other tangible assets, pre-operative/preliminary expenses, etc.	Rs.2.00 core
2.	Construction of Building	Rs.0.40 crore

Release of Assistance

The SPV will maintain an escrow account with any scheduled bank, and all payments for CFC will be made through the same account which will be jointly operated by one member of SPV and other members from Regional Office.

The SPV should submit the claim for the issuance of financial assistance to the concerned Regional Office of the Textile Commissioner.

Implementation of the Scheme

The following are the schedule followed for releasing the grant to the SPV:

1st Installment: To the extent of 30% of the total project cost will be disbursed after submission of the claim by the SPV in the prescribed form along with the documents enclosed to the Regional Office concerned of the Textile Commissioner within 90 days of the sanction. The LLMC should submit the report to the Office of the Textile Commissioner within 30 days of the submission of the claim.

2nd Installment: The remaining 30% of subsidy will be released after getting the utilization Certificate of 1st instalment and submission of claim by the SPV in the prescribed form along with the documents enclosed to the concerned Regional Office of the Textile Commissioner within 180 days from the date of sanction. Upon completion of 60 % or above construction which will be duly approved by the Government Architect and Chartered Accountant. The LLMC will submit the report to the Office of the Textile Commissioner within 30 days of the submission of the claim.

3rd Installment: The remaining 40% of the subsidy will be released after the successful completion of the construction of the shed or building and after submission of claim in prescribed form along with the required documents to the concerned Regional Office of the Textile Commissioner within 270 days from the date of sanction and certification by Government Architect and Chartered Accountant. The LLMC will submit the report to the Office of the Textile Commissioner within 30 days of the submission of the claim.

Online Application Procedure for the Scheme

Step 1: The eligible applicant needs to visit the official portal of the Ministry of Textile, Government of India.

Step 2: Click on the “Register” button to apply for CFC Scheme.

Step 3: On the next page, the applicant has to select the Common Facility Centre (CFC) scheme from the list of schemes.

Step 4: The registration page will open up, fill the SPV detail to complete registration.

Step 5: After filling the details, the applicant will receive the OTP to the registered e-mail id.

Step 6: Enter the following OTP on the screen, which is displayed and then click on the “Process” button.

Step 7: After entering OTP, the system will display a successful message.

Step 8: Now enter a username, i.e., email id and enter the password of your choice and re-enter the password to confirm.

Step 9: Click on “Login” button to log in to the portal to apply for the CFC scheme, and then the dashboard will be displayed after a successful login.

Step 10: Select “Apply for Annexure-I/II” to apply for CFC scheme.

Step 11: Click on “icon” in the current page to add member, bank and cluster details.

Step 12: Now, the registered information will be fetched automatically. Fill in following information which is compulsorily required.

Step 13: After filling the details, upload the required documents along with the application form.

Step 14: Click on “Submit to branch” to apply to the branch.

Step 15: After submission, you can view the application but cannot edit.

Step 16: After successful acceptance from the PDC, you can submit the First Claim at this point of time;

Step 17: Then the subsidy release status will be updated on the same portal, after releasing the funds by PDC.

FAQs

What is the Common Facility Centre (CFC) Scheme?

The Common Facility Centre (CFC) Scheme is a government initiative designed to provide shared facilities and services to small and medium enterprises (SMEs) in specific sectors or clusters. The scheme aims to enhance productivity, competitiveness, and innovation by offering access to advanced technology, equipment, and infrastructure.

Who can benefit from the CFC Scheme?

The CFC Scheme primarily benefits small and medium enterprises (SMEs) that are part of a specific industrial cluster or sector. These businesses can utilize the shared facilities and services provided under the scheme to improve their production processes, reduce costs, and increase efficiency.