Guidelines of MSE-CDP
The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India (GoI) has adopted the Cluster Development approach as a key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country MSE-CDP scheme msme scheme for cluster
Objectives of the Scheme
To support the sustainability and growth of MSEs by addressing common
issues such as improvement of technology, skills & quality, market access, etc.
(ii) To build capacity of MSEs for common supportive action through formation
of self help groups, consortia, upgradation of associations, etc.
(iii) To create/upgrade infrastructural facilities in the new/existing Industrial Areas/ Clusters of MSEs.
(iv) To set up Common Facility Centres (for testing, training, raw material depot, effluent treatment, complementing production processes, etc.).
(v) Promotion of green & sustainable manufacturing technology for
the clusters so as to enable units switch to sustainable and green production processes and products
A Detailed Project Report (DPR) is required to prepared for a technically feasible and economically viable Project for availing assistance under the scheme.
The Government of India will not give any grant for preparation of DPR.
However, a sum equivalent to 4% of Project Cost not exceeding Rs.50.00 lakh (fifty lakh) will considered as a contribution by the Special Purpose Vehicle (SPV) / State Government, as the case may be, towards this purpose, including consultancy charge to Technical Institution etc from conceptualization stage to operational handholding support under the Project, with the approval of State Level Steering Committee (SLSC)
These guidelines of MSE-CDP are issue in supersession of
the previous guidelines and encompasses, inter-alia, the procedure and funding pattern for following admissible components:
Common Facility Centers (CFCs):
This component would cover creation of tangible “assets” as Common Facility Centers (CFCs) like Common Production/ Processing Centre (for balancing/correcting/improving production line that cannot undertaken by individual units), Design Centres, Testing Facilities, Training Centre, R&D Centres, Effluent Treatment Plant, Marketing Display/Selling Centre, Common Logistics Centre,
Common Raw Material Bank / Sales Depot, Plug & Play facility, facilities that can support marketing systems, collective Geographical Indications (GI),
development of common production & product standards, development of new product designs, improved systems for better hygiene & working conditions for workers, systems for higher overall productivity & capacity utilization of the cluster,
systems for skill upgradation of the cluster, as well as supporting diversification activities of enterprises and startups in the cluster, etc.
Backward/Forward linkages for value addition in bi-product/waste of cluster units would also be admissible for enhancing productivity/profitability of individual units
subject to condition that CFC itself would not sell/market products/bi-products directly.
The GoI grant will restricted to 70% of the cost of Project of maximum Rs.20.00 crore.
GoI grant will be 90% for CFCs in NE & Hill States, Island territories, Aspirational Districts/LWE affected Districts, Clusters with more than 50% (a) micro/ village or (b) women owned or (c) SC/ST units.
The cost of Project includes cost of Land (subject to maximum of 25% of Project Cost), building, pre-operative expenses, preliminary expenses, machinery & equipment,
miscellaneous fixed assets, support infrastructure such as water supply, electricity and margin money for working capital.
This component would cover development of land, provision of water supply, drainage, power distribution, non-conventional sources of energy for common captive use, construction of roads, common facilities such as first aid centre, canteen, any other need based infrastructural facilities in new industrial (multi-product) areas/estates or existing Industrial Areas/Estates/Clusters.
Development of Flatted Factory Complexes can also undertaken under this component
The GoI grant will restricted to 60% of the cost of Project (Rs.10.00 crore for Industrial Estate & Rs.15.00 crore for Flatted Factory Complex).
GoI grant will be 80% for Projects in NE & Hilly States, Island territories, Aspirational Districts/LWE affected Districts, industrial areas/estates/ Flatted Factory Complex with more than 50% (a) micro/village or (b) women owned or (c) SC/ST units.
Details of components for new site development . For existing Industrial Estates/Industrial Area/Flatted Factory Complex, up-gradation proposals will be based on actual requirements.
The State/UT Governments will provide suitable land for the Projects. The remaining amount over and above GoI grant may be loan from SIDBI/ Banks/Financial Institutions or equity from State/UT Government. The State/UT Governments will also meet the cost in excess of Rs.10.00 crore/ Rs.15.00 crore or any escalation in cost.
Marketing Hubs/Exhibition Centres by Associations:
The GoI assistance to Associations for establishing Marketing
Hubs/Exhibition Centres at central places for display and sale of products of Micro and Small Enterprises.
The GoI grant willrestricted to 60% of the cost of Project of maximum
Rs.10.00 crore for Product Specific Associations with BMO rating of Gold Category and above from NABET (QCI) and 80% for Associations of Women Entrepreneurs.
Remaining project cost is to be borne by SPV/State Government.
The GoI contribution will be towards construction of building, 7 furnishings, furniture, fittings, items of permanent display, miscellaneous assets like generators, etc.
(b) Cost of construction of Marketing Hub/Exhibition Centre (Not exceeding Rs.4.00 crore/built-up area of 2000 sq meter) would be eligible activity for GoI grant under this component
The projects with cost higher than ceiling limit i.e. Rs.10.00 crore may also considered under MSE-CDP. However, the GoI grant will calculated with Project cost ceiling of Rs.10.00 crore
This component would cover GoI financial assistance for implementation of Thematic Interventions in approved/completed CFCs for following activities: (a) Training Programmes.
(b) Exposure Visits.
(c) Strengthening the Business Development Service (BDS) provision through a panel of service providers.
(d) Any other activity related to creating business eco-system in cluster mode.
The GoI grant will restricted to 50% of total cost of maximum 5 activities not exceeding Rs.2.00 lakh for each activity.
As such the maximum GoI grant under this component for each CFC would be Rs.10.00 lakh. Remaining cost would be borne by SPV/State Government
Support to State Innovative Cluster Development Programme:
A few State Governments such as Haryana, Maharashtra, Bihar, etc. have initiated State funded Cluster development Programme
to support soft and hard interventions in clusters with limited funding support.
In order to strengthen this activity, this component would provide co-funding of the CFC projects of State Cluster development Programme on matching share basis.
The GoI fund would limited to State Government share or Rs.5.00 crore whichever is lower.
The assistance would 90% of project cost in respect of CFC projects in
North East / Hilly States, Island territories, Aspirational Districts / LWE affected Districts, as well as for projects
where beneficiaries are SC / ST / Women own enterprises, as per the scheme guidelines of State Cluster Development Programme.