Background

(a) The Ayurveda, Yoga and Naturopathy, Unani, Siddha & Homeopathy (AYUSH) industry represents the traditional form of Indian medicine, and has been part of India’s socio- cultural heritage. The industry, that has approximate annual turnover of Rs.12000 Crore is essentially dominated by micro, small and medium enterprises (MSMEs) which account for more than 80% of the enterprises that are located in identifiable geographical clusters.

(b) The market for traditional health medicine has been increasing steadily, the world over. Although AYUSH industry has been one of the most traditional form of medicine, it has not been able to exploit the emerging market opportunities, primarily due to constraints such as: fragmentation of the industry, lack of standardization of raw material and the finished products, inadequate R&D, slow pace of modernization of production processes and technology, absence of focused marketing and branding, inadequate emphasis on HRD and others due to which AYUSH Sciences are not recognized as Medical & Health Care Sciences.

(c) AYUSH industry has the potential to contribute positively to national health programme by providing traditionally and historically proven healthcare solutions.

(d) Cluster based approach is increasingly being recognized as an effective and sustainable strategy for competitiveness enhancement of MSMEs. Such an approach, which leverages the geographical proximity of the enterprises on ‘collaborating while competing’ principle is participatory, cost effective and provides critical mass for customization of interventions.

(e) It is in this context that this scheme for AYUSH clusters’ development was introduced during the XIth plan and is being implemented during the XII Five Year Plan. 

The Scheme Objectives:

(a) To fill in the critical gaps in the sector especially related to standardization, quality assurance and control, productivity, marketing, infrastructure and capacity building through a cluster based approach. preferably for classical ASU and Homoeopathic drugs.

(b) To encourage the level of organisation in the sector thereby creating social capital for sustainability of collective initiatives.

(c) The ‘Scheme for Development of AYUSH Clusters’ is a Central Sector Scheme and would be co-terminus with the 12 th Five year plan. 2

(d) Department of AYUSH would allocate Rs 121.75 Crores in the 12 th five year plan to fund the projects under the scheme.

(e) The Scheme would be implemented on a Support from Department of AYUSH and support would be by the way of grant to the Special Purpose Vehicle (SPV), formed by group of entrepreneurs from AYUSH sector. 

Eligibility

(a) The assistance under the scheme would be available to units operating in the following sectors; located in existing clusters i.e. a group of AYUSH enterprises located in close proximity:

(i) Ayurveda (ii) Siddha (iii) Unani (iv) Homeopathy (v) Yoga and naturopathy

(b) SPV formed by at least 15 enterprises located in an existing cluster i.e. a group of AYUSH enterprises located in close proximity: shall be eligible for funding under the scheme. Out of 15 participating units, at least 75% should be manufacturing units having valid GMP certificates for manufacture of AYUSH drugs. Out of which 5 participating units should have Annual turnover of at least Rs.20 lakhs and another 5 participating unit should have Rs.50.00 lakhs turnover to ensure viability of the cluster. The cluster for the purpose of this scheme would be an area covering a radius of 100 kms and at least 15 participating enterprises should be located in this cluster. Minimum two acres land is required for a SPV and the land should preferably be an industrial estate/zone/park/area so designated by the competent authority of the State. In case the land is not available in an industrial estate/zone/park/area the proposals with land in the name of the SPV in a non-industrial zone can also be considered with the condition that certificate of industrial land used should be produced by the SPV at the time of final approval. As a special case dispensation for N.E. and Hilly states and backward states may be given and they can be exempted from the present turnover existing under the Scheme and on the basis of recommendations of PMC and decision of Screening Committee.

(c) Current account should be opened in the name of SPV and all the members should contribute at least Rs 20 lakhs as a corpus fund to demonstrate their commitment towards the projects.

Scope and Coverage

The Scheme would cover two types of interventions namely Core intervention and Add on intervention 3

(i) Core Interventions such as those related to setting up of common facilities for testing, certification, standardization, quality control and other capacity building measures

(ii) Add on Interventions such as those related to marketing/ branding, provision of general infrastructure to support production units etc. 

Financial Assistance

(a) The assistance would be restricted to 60 % of the Project Cost subject to a maximum of Rs. 15.00 crores. The remaining 40% would be required to be arranged by the SPV through equity, borrowings from Banks / Financial Institutions and other sources. The assistance from the Department of AYUSH will be utilized only for physical infrastructure, civil works, construction of building, plants & machinery and equipments, All remaining expenses on purchase of land of SPV salary of cluster development executive, joint participation in national and international exhibition, business delegations abroad and brand development etc. will be borne by SPV.

(b) Project cost for the purpose of the scheme shall mean the total cost of proposed interventions as mentioned in Section 4

(c) The scheme would be modular in nature with a provision to add interventions to the approved project DPR while implementation is on. The addition however should be in conformity to the over all project and the scheme objectives and subject to approval by PAC.

(d) SPVs may dovetail funds from other sources as well for the project, provided there is no duplication of funding for the same component/ intervention. However, in cases of such dovetailing, it shall be ensured that the 5 contribution of the participating units of SPV is at least 10% of the overall project cost.

(e) The project cost of the components of a common facility (such as those mentioned under core interventions), for the purpose of this Scheme, shall include Land, Building, Plant and machinery, Support infrastructure such as water supply, electricity supply, roads etc subject to the condition that it shall be the responsibility of the SPV to bring in land as its contribution.

(f) While the funding under the scheme is generally for development of Greenfield facilities, PAC may also consider the proposal of SPV for upgrading/ strengthening of any existing facility into a common facility based on the merit of such proposal.

(g) The cost of professional experts engaged by SPV will be part of the project cost.

(h) The cost incurred by SPV on services, expenses incurred on trainers fee, logistics of trainers, training material, exposure visits, IT support for SPV, salary of CDE (Cluster development executive), Resource centre, designing and printing of brochure, stall space rent, design and hosting of website, cost of hiring PR Agency, advertising and promotion etc are the components for project cost

(i) The interventions listed under heading scope and coverage are indicative in nature, any other need based intervention subject to approval by the PAC is eligible to be funded under the scheme. Nature of such an intervention, whether core or add on would be decided by the PAC. 

Objectives

The Objectives of scheme are to fill in the critical gaps in the sector especially related to standardization, quality assurance and control, productivity, marketing, infrastructure and capacity building through a cluster based approach preferably for classical ASU and Homoeopathic drugs.