MSE-CDP

Common Facilities Center(CFC)

Beneficiary list

          The GoI grant will be 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, (b) women owned, (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

  • The entire cost of land and building for CFC shall be met by SPV / State Government concerned.

  • CFC can be set up in leased premises. However, the lease should be legally tenable and for a fairly long duration (say 15 years). In case CFC is established on leased land the Lease Period should be more than 30 years.

  • An SPV should be a Section 8 company (as per Companies Act 2013), with evidence of prior experience of positive collaboration among its members

  • There should be a minimum of 20 MSE cluster units serving as members of the Special Purpose Vehicle (SPV). There is no ceiling on the maximum number of members. In special cases, where considerations of investments, technology or small size of the cluster warrant lesser number of units, a minimum of 10 MSE units may be considered for the SPV.

  • The contribution of the cluster beneficiaries should be as high as possible but not less than 10 per cent of the total cost of CFC. State Government contribution will be considered as gap funding. All the participating units should be independent in terms of their financial stakes and management. No single unit will hold more than 10 per cent in the equity capital (or equivalent capital contribution) of the SPV.

  • Large mother manufacturing firms (whether in the public or private sector), Central or State Government Autonomous Bodies such as MSME Technology Centres, other major buyers of the MSE cluster products, commercial machinery suppliers, raw material suppliers and Business Development Service (BDS) providers will be eligible to contribute up to 49 per cent of SPV contribution, provided management of SPV remains clearly with the intended beneficiary SPV.

  • The Project (setting up of CFC) should be completed and operational within two years from the date of final approval. If Project could not be completed in two years, an extension upto a period of one year can be considered and approved by State Level Steering Committee

  • The CFC with cost higher than ceiling limit i.e. Rs.20.00 crore may also be considered under MSE-CDP. However, the GoI grant will be calculated with Project cost ceiling of Rs.20.00 crore.

  • Funds will be released in three / four installments (after final approval) depending upon the implementation plan, requirements of funds.

  • A Tripartite Agreement among the GoI, the State Government concerned and the SPV shall be signed for CFC Projects. The format of the agreement is given at Annexure 2A.

                                                                                                         Infrastructure Development:

  • Infrastructure Development Projects under the scheme will consist of Projects for infrastructural facilities like power distribution network, water, telecommunication, drainage and pollution control facilities, roads, banks, raw materials, storage and marketing outlets, common service facilities and technological backup services

  • The GoI grant will be 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, (b) women owned, (c) SC/ST units. Details of components for new site development are given at Annexure 3A & 3B. For existing clusters, upgradation 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.

  • A variation of 10% max. is admissible in component-wise cost subject to keeping overall Project cost unchanged.

  • The Project should be completed within two years from the date of final approval, unless extended with the approval of Steering Committee. The extension would be granted for a period of six months by Steering Committee based on the justification provided by State Government. The extension is, however, subject to a reduction of 10% of GoI share which is to be borne by the State Government / Implementing Agency as additional contribution. Second / subsequent Project in a district will be considered only if earlier approved Project is completed in all respects.

  • Funds will be released on reimbursement basis or on matching share basis (Implementing Agency will deposit its share in the dedicated bank account in the name of Project and submit a bank certificate). 1st installment would be limited to Rs.2.00 crore only.

Marketing Hub / Exhibition Centers by Association

  • The GoI grant will be restricted 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.

  • Cost of construction of Marketing Hub / Exhibition Centre (Not exceeding Rs.4.00 crore / built-up area of 2000 sq meter) would also be eligible activity for GoI grant under this component.

  • Large mother manufacturing firms (whether in the public or private sector), other major buyers of the cluster / association MSE products, commercial machinery suppliers, raw material suppliers and Business Development Service (BDS) providers will be eligible to contribute up to 49 per cent of SPV contribution, provided management of SPV remains clearly with the intended beneficiary SPV. The SPV may also raise loans from banks to take care of any shortfall, expansion, etc. on the condition that the asset created with Government assistance will not be hypothecated and the first right thereto will rest with the Government.

  • 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 be limited to State Government share or Rs.5.00 crore whichever is lower. The assistance would be 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 owned enterprises, as per the scheme guidelines of State Cluster Development Programme.

  • The proposal would be then examined by MSME-DI

  • On receipt of complete information, the examination of the proposal shall be completed by MSME-DI within a period of 1 month and a Focus Report covering all the above aspects shall be uploaded on MSE-CDP portal. A system generated e-mail will be issued to SPV and Cluster Division in Office of DC (MSME).

  • The group (s) would then be advised thereafter to make presentation before SLSC.

  • Highest marks scored proposal would be recommended and other groups, if any, would be advised to be part of the selected group of industries in order to enhance inclusiveness and effectiveness of the project.

Release of Funds

CFC

  • Contribution by the SPV or the beneficiaries share should be upfront. However, State Government may release their complete share either in one go or proportionately in the ratio of 40:30:30 and the same should be released prior to request for release of GoI grant is made by IA. In case the State share release is high, the GoI grant will be released proportionately, but not more than 50% as first installment. All the members of the cluster and their details such as Mobile Number, Udyog Aadhaar Memorandum (UAM) Number, etc. to be uploaded on MSE-CDP Portal before request for release of 1st installment of GoI grant is made by IA.

  • On utilization of 1st installment of GoI grant, State Government / IA would submit request for 2nd installment of GoI grant (30%) along with Utilization Certificate (UC) in respect of utilization of 1st installment of GoI grant

  • On utilization of 2nd installment of GoI grant, State Government / IA would submit request for 3rd installment of GoI grant (retaining 10% to be released as final installment) along with Utilization Certificate (UC) in respect of utilization of 2nd installment of GoI grant

Infrastructure Development

  • Funds will be released on reimbursement basis or on matching share basis (Implementing Agency will deposit its share in the dedicated bank account in the name of Project and submit a bank certificate). 1st installment would be limited to Rs.2.00 crore only.

  • State Government / IA would submit request for 1st installment of GoI grant (maximum Rs.2.00 crore) along with Physical and Financial Progress Report signed by IA countersigned by MSME DI

Marketing Hub / Exhibition Centres by Associations

  • The GoI grant will be restricted 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, furnishings, furniture, fittings, items of permanent display, miscellaneous assets like generators, etc.

  • Cost of construction of Marketing Hub / Exhibition Centre (Not exceeding Rs.4.00 crore / built-up area of 2000 sq meter) would also be eligible activity for GoI grant under this component.

  • The cost of land (not exceeding 25% of project cost) can be taken as SPV / State Government contribution. The entire cost of land for Hub shall be met by SPV / State Government concerned. In case existing land is provided by stakeholders, the cost of land will be decided on the basis of valuation report prepared by an approved agency of Central/State Govt. Departments/FIs/Public Sector Banks. Hub can be set up in leased land / premises. However, the lease should be legally tenable and for a fairly long duration (say 30 years).

Thematic Interventions:

  • This component would cover GOI financial assistance for implementation of Thematic Interventions in approved / completed CFCs for following activities:

 

  1. Training Programmes.
  2. Exposure Visits. Strengthening the Business Development Service (BDS) provision through a panel of service providers.
  3. Any other activity related to creating business eco-system in cluster mode.

 

The GoI grant will be restricted to 50% of total cost of maximum 5 activities not exceeding Rs.2.00 lakh for each activity. As such the total GoI maximum grant under this component for each CFC would be Rs.10.00 lakh. Remaining cost would be borne by SPV / State Government.

  1. Support to State Innovative Cluster Development Programme:
  2. 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 be limited to State Government share or Rs.5.00 crore whichever is lower. The assistance would be 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 owned enterprises, as per the scheme guidelines of State Cluster Development Programme.

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