A govt scheme that offers financial support to develop clusters

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The scheme aims at holistic and integrated development of MSMEs, which can be done through a combination of soft and hard interventions by the government

The Ministry of Micro, Small and Medium Enterprises (MMSME) offers a very useful scheme —the Micro and Small Enterprises-Cluster Development Programme (MSE-CDP), which aims to provide a complete manufacturing ecosystem to companies that manufacture the same, similar or related products, and to those that offer linked services. The scheme is operational for the past eight years.

In order to deliver quality and cost effective products, it is imperative that manufacturers are equipped with state of the art technology, infrastructure and manpower. Realising this aspect, MMSME had launched the MSE-CDP to support, sustain and promote the growth of MSEs by addressing common issues such as the improvement of technology, skills and quality, access to capital and markets, capacity building, etc.

How to avail benefits of this scheme

Companies seeking to be a part of this scheme need to form a cluster. This is the basic criteria to avail the benefits offered under this scheme, so individual companies are not eligible. A cluster, according to the definition of this scheme, is a minimum of 40-50 units or a group of enterprises closely located and manufacturing the same or similar products. While companies can directly approach the MMSME, the best option would be to approach an industry association, which will, in turn, take up the issue with MMSME.

“This is one of the most flexible schemes introduced by MMSME. Companies can apply through online forms, avoiding the need to make any personal visits that hamper their productivity or interfere with their normal working hours. We are also open to suggestions on how to improve this process,” says Sandeep Agarwal, assistant director, MSME—Development Institute.

Benefits of the scheme

The MSE-CDP aims at holistic and integrated development of MSMEs, which can be done through soft and hard interventions. Soft interventions include diagnostic studies, capacity building, marketing development, export promotion, skill development, etc. Hard interventions include setting up of common facility centres and infrastructure upgradation.

As far as financial support is concerned, for soft interventions, the maximum a project is eligible for is Rs 2.5 million, of which the government will pay 75 per cent while 25 per cent will be a combined contribution from the companies forming the cluster. Similarly, for hard interventions, the maximum eligible for a project is Rs 150 million, with the government’s contribution amounting to 70 per cent. Apart from this, those in the cluster can also avail the benefits of infrastructure development (in the new or existing industrial estates/areas) wherein the maximum project cost a cluster can avail is Rs 100 million, with the government’s contribution amounting to 60 per cent. The responsibility of getting the land for the cluster entirely lies with the companies forming the cluster.

Two electronics clusters have already been developed and are operational in Andhra Pradesh and Himachal Pradesh, apart from one each in Jharkhand, Orissa and Punjab, and four in Maharashtra. Three clusters formed under this scheme are also operational in Noida and Faridabad.

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To know more about this scheme, visit www.dcmsme.gov.in/schemes

By Richa Chakravarty

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