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Mega Cluster

Ministry of Textiles

Mega cluster approach is a Drive to scale up the infrastructural and production chain at Handicrafts clusters which have remained unorganized and have not kept pace with the modernization and development that have been taking place so far. 


The prospect of this sector lies in infrastructural improvement, modernization of the tools, machinery, process and product diversification and creating strong brands. Innovative designs as well as technical know-how, furthered by brand building of the native products hold the key to creating a niche market for the products manufactured by the clusters. The proposed programme is expected to support the Up gradation of infrastructural facilities coupled with market linkages and product development & diversification.

Nature of Assistance

Fiscal Incentives:


Funds to the tune of 3% (max.) of project cost shall be earmarked for establishing baseline data / DPR. 

50% of the approved project cost will be released as advance. Second Installment @ 40% of the approved project cost will be released on utilization of 70% of 1st installment. The last 10% amount will be released as reimbursement on completion of project and submission of utilization report etc.


Non-Fiscal Incentives:


i. Employment Generation

ii. Better living standards for the existing artisans.

iii. Foreign Exchange earnings by export;

iv. Substantial Increase in quality and value added Production;

v. Increase in the business of small entrepreneurs;

vi. Savings in cost by manufacturers in the cluster due to better  infrastructure and Government induced benefits;

vii. Revenue generation to local bodies and State & Central Governments;

viii. Growth of industry in an organized form.


Who can apply?

The Implementing Agency (lA), which will be a Special Purpose Vehicle (SPV), shall be a legal entity, preferably a Company with the participation of related stakeholders, particularly the leading manufacturers, suppliers, buyers, and artisan federations/SHGs. The SPV shall be selected preferably through open competitive bidding process.


However, selection of SPV would mainly depend on the project profile, activities required to be intervened and on various other parameters, therefore selection of such Sl. No Activity GOI share Financial limit of GOI in Rs. SPV share 1 Soft skills such as skill development Training, Product Development workshop, etc. I year – 100% II year - 90% III year – 75% IV year – 75% Rs 10 crores/ project Nil 10% 25% 25% 2 Common production related Infrastructure which are artisan centric such as CFC, Work shed, etc 100% Rs 20 crores/ project Land and recurring expenditu re 3 Other commercial infrastructure – such Gas pipe line, etc 75% Rs 20 crores/ project 25% and recurring expenditu re 4 Facility Centers for Exporters/entrepreneu rs 30% Rs. 2 crores/ facility centre/Entre preneur 70% suitable SPV after seeking formal approval of PAMC.


As Handicrafts sector is highly unorganized, the procedure for selection of SPV in special cases shall be kept open for PAMC/Government. 

How to apply?

Eligible agencies can apply online.



Shri Ak Mohanti

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