Note on Schemes and Policies for setting up of Plastic Parks

Government of India as well as the Chhattisgarh state government has come up with following schemes
and policies to boost the plastic manufacturing and processing sector in the country. Following are
some of the major schemes and policies.

Scheme for setting up of Plastic Park

Department of Chemicals & Petrochemicals has formulated Scheme for setting up of plastic parks in
India with a view to synergize and consolidate the capacities of plastic industries through cluster
development. Key objectives of the above scheme are as presented in diagram below:

Figure 1: Key Objectives of the Scheme

Source: chemicals.nic.in/FPP260613.pdf and EY Analysis

Key features of the scheme:

One time grant-in-aid from the central government to the Special Purpose Vehicle (SPV)
SPV to be formed between the state government / agencies and user enterprises representing
the plastic sector / sub sector
Illustrative list of components which are eligible under the scheme
o Supporting infrastructure in the park roads, water supply, drainage, CETP, power
supply, etc.
o Buildings for support services administrative buildings, canteen, hostels, facilities for
labour, marketing support system, etc.
o Common enabling facilities testing labs, training centres, research labs, etc.
o Other components administrative & management support, soft interventions
(surveys, awareness programs, skill development, etc.)
Scheme Steering Committee (SSC) shall approve the project components and funding thereof
depending upon the merits of the proposal on case to case basis
Project cost would be the cost of project components including the land
Plant & machinery for production purposes are out of the schemes funding scope
Funding pattern / financial assistance under the scheme:

Chart below presents the types and extents of funding for the project.

Figure 2: Funding Pattern for the Plastic Park

Source: chemicals.nic.in/FPP260613.pdf and EY Analysis

Details about the financial assistance are provided below:

Grant-in-aid: Up to 50% of the project cost (ceiling of INR 40 Crore per project)
o Common enabling facilities - Minimum 25% of the grant
o Administrative & management support Maximum 10% of the grant
o Soft interventions 75% of the total cost of soft interventions subjected to ceiling of
INR 50 lakh (may be met with approved grant)
o Release of grant-in-aid amount:
1st instalment: 20% as mobilization advance, on final approval of the project
2nd instalment: 35% (upon 60% utilization of 1st instalment)
3rd instalment: 35% (upon 100% and 60% of 1st and 2nd instalments
respectively)
4th instalment (final): 10% (upon 100% utilization of previous instalments and
operationalization of 25% of units)
Remaining contribution state government/ agency and loan from financial institutions
Equity contribution of the state government / agencies at least 26% of the cash equity of the
SPV (excluding value of any land given as equity)