Dear All,

Government proposes scheme to set up of Plastic Parks in India 

In order to promote downstream plastic processing industries, the Government of India has proposed to support setting up of ‘Plastic Parks’ in India . Currently the share of India in world trade for plastics is very low. Further, the industry in the country is very large however highly fragmented with the dominance of tiny, small and medium units. 

The scheme would be implemented by the Department of Chemicals and Petrochemicals through setting up of a ‘Special Purpose Vehicle’ (SPV), which would provide infrastructure and common facilities for the industries. State Government or its agency, which would set up such SPV, will need to have mandatory equity participation in it. There would also be a requirement of share subscription agreements between the SPV and its members. The contribution of the members will have to be at least 20% of the total equity, including the cost of the land. 

The Government of India would provide a Grant-in-Aid upto 50% of the project cost, not exceeding Rs. 40 crore per SPV to be set up for the purpose. The remaining contribution in the SPV will be from the State Government, its agencies, beneficiary industries or loan from financial institutions. The release of funds will be based on identification of milestones and time limits set for each such milestone to be decided at the time of the project approval by a Scheme Steering Committee (SSC) in the Department of Chemicals and Petrochemicals. The proposals are to be made by the State Governments. 

The scheme aims at increasing investment in the sector for additions in capacity and for increased exports in the sector. Further, in order to achieve environmentally sustainable growth, a cluster development approach will be adopted through innovative methods of waste management, recycling etc. 

Warm regards,

Dr. S P Sharma

Chief Economist