MSME Innovative Scheme was launched in 2022 by Ministry of MSME with an aim to promote and support untapped creativity of MSME sector by fostering innovation and providing vital support for concept development, design enhancement, and intellectual property protection.
With these three core components – Incubation, Design, and Intellectual Property Rights (IPR) – the scheme facilitates idea validation, product development, and legal assistance to bolster the competitiveness of MSMEs. To know more, read our blog.
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About the scheme
MSME Innovative scheme was introduced to help boost innovation among MSMEs. It seeks to help them develop new ideas and designs and reimburse costs for Intellectual Property Rights applications and other permissions issued by the government.
This scheme also serves as a link between industry and academia leaders and innovators, promoting new product development and offering guidance.
This scheme is one of the three components of the MSME Champions scheme (erstwhile Credit Linked Capital Subsidy-Technology Upgradation Scheme) others MSME-Sustainable (ZED) and MSME-Competitive (Lean) components.
The Innovative scheme further has three components viz., Incubation, Design, and Intellectual Property Right and aims to foster innovation across the entire value chain, spanning from idea generation to the realization of innovative applications, by facilitating incubation and design interventions.
(Read about Govt’s Scheme which is enhancing the productivity, efficiency, and competitiveness for MSMEs– Lean Manufacturing Competitiveness Scheme (LMCS) Read the blog here)
Scheme Objectives
The basic objective of this MSME Innovative scheme is to promote a culture of innovation and creative problem solving through knowledge sharing and collaboration amongst industry, academia, government institutions, research laboratories etc. Let’s understand the key goals of this scheme:
❖ To provide appropriate facilities and support for development of concept, design competitiveness and protection & commercialization of intellectual creations of MSME sector.
❖ To serve as a connecting link between industrial/academia leaders and innovators, in order to encourage new product development and hand-holding.
❖ To promote all forms of innovations in the complete value chain from developing ideas into innovative applications through incubation and design interventions.
❖ To focus on developing affordable innovations that can benefit a large number of businesses.
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Details about all the three components- Incubation, Design and IPR components:
INCUBATION
Purpose of Incubation component of MSME Innovative scheme is to promote and support untapped creativity and to promote adoption of latest technologies in MSMEs that seek the validation of their ideas at the proof-of-concept level. The scheme also supports engagement with enablers who will advise such MSMEs in expanding the business by supporting them in design, strategy and execution. Let’s get onto the details about the scheme.
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i) Objective of the Scheme
The scheme’s goal is to support creative ideas and encourage the use of new technologies in MSMEs. It also helps these businesses grow by providing advice on strategy, and execution through collaboration with advisors.
ii) Activities
- Recognition of eligible institutions as Host Institute (HI) to act as Business Incubator (BI)
- Approval of Ideas of Incubatees submitted through Host Institute (HI)
- Assistance for nurturing of Ideas to HI
- Assistance towards Capital Support to HI for Plant and Machinery
iii) Eligibility Criteria: Registration as Host Institute (HI)
Institutions such as Technical Colleges, Universities, other Professional Colleges/Institutes, R&D Institutes, NGOs involved in incubation activities, MSME-DIs/ Technology Centres or any Institute/Organization of Central/State Government may apply for registration as an HI and act as a Business Incubator (BI) for nurturing of ideas from the initial stage of conceptualization to the commercialization stage through HIs/ BIs. The institutions may apply for registration as HI through the MIS portal of the DC MSME website. (innovative.msme.gov.in) .
iv) Financial Assistance under the Scheme
- Up to maximum of Rs. 15 lakh per idea shall be provided to HI for developing and nurturing the ideas.
- Up to Rs. 1.00 cr. (max) shall be provided to HI for procurement and installation of relevant plant and machines including hardware and software etc. in BI for R&D activities and common facilities for incubatees of BI
The Incubation component involves recognition of eligible institutions as Host Institute (HI) to act as business incubators, approval of ideas of incubatees submitted through HI, assistance for nurturing of ideas to HI and assistance towards capital support to HI for plant and machinery.
Technical colleges, universities, professional colleges/institutes, research and development institutes, NGOs engaged in incubation activities, MSME-DIs/Technology Centres, and any central/state government institution/organization have the opportunity to register as a HI and serve as a business incubator.
Interested institutions can apply for HI registration via the Management Information System (MIS) portal on the DC MSME website.
The institutions once approved as HI can invite ideas from MSMEs and others and after due diligence can submit the selected ideas through the MIS portal of the DC MSME website.
The ideas are evaluated in four stages.
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DESIGN
The scheme will help MSMEs to avail advice on all aspects of design. It helps MSMEs realize and achieve their design-related objectives. This specialist advice will be provided by experienced designers for new product development as well as enhancing existing product portfolio.
The Design component has two parts viz., Design Project and Design Awareness Programme. The Project aims to facilitate MSMEs to develop new design strategies and or design related products through interventions and consultancy while the Awareness Programme focuses on creating general awareness and sensitization about the value and power of design for businesses through seminars, talks, workshops etc.
i) Objective
The objective of Design Component is to bring Indian manufacturing sector and Design expertise/ Design fraternity on to a common platform. It aims to provide expert advice and cost-effective solution on real time design problems for new product development, its continuous improvement and value addition in existing/new products.
ii) Details
The Design scheme is divided in two major parts, viz., Design Projects and Design Awareness Programme.
Design Project: To facilitate MSMEs to develop new design strategies and or design-related products through interventions and consultancy.
Design Awareness Programme: The objective is to create general awareness and sensitization about the value and power of design for businesses through seminars, talks, workshops etc. The purpose of these activities is to sensitize MSMEs about the usage of design/innovation in various facets of their industry.
Under the design component, the scheme would provide mentoring and financial assistance towards solving design-related problems for new product development as well as improvement in existing products. The partner institutions under the scheme are IISc Bangalore, IITs, National Institute of Technology, National Institute of Design, and others..a
iii) Benefits
Design Project:
Micro enterprises would have access to 75 per cent of the total project cost while small and medium businesses would be provided with 60 per cent financing or up to a maximum of Rs 40 lakh per project and the remaining project cost will be borne by MSMEs
The total project cost will be provided as a grant in 3 stages:
Stage 1: Strategy & Concept- 40%
Stage 2: Detail Design – 30%
Stage 3: Successful Completion of the prototype/product and Final Report submission – 30%.
Student Project: Students participating in the scheme would get the assistance of 75 per cent of the total project cost or up to a maximum of Rs 2.5 lakh.
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iv) Eligibility
The beneficiary unit(s) must typically be a registered micro, small or medium enterprises.
Should have a valid Udyog Aadhaar Memorandum (UAM) or Udyam Registration certificate.iv) Application Process
Online Registration Process:
Step 01: After opening the website https://innovative.msme.gov.in/ , click on Design.
Step 02: On the next window, click on Join Design Scheme.
Step 03: Put the Udyam Registration Number along with the Registered Moblile Number.
Step 04: Click on Validate.
v) Documents Required
- Udyog Aadhaar Memorandum (UAM) or Udyam Registration (UR) certificate.
- UAM Registered mobile number.
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IPR
This component offers legal and intellectual property filing support including patents, trademarks, copyrights, designs, geographical indications (GI) etc. The programme also provides IP advisory, Consultation, Patentability Searches, Technology Gap Analyses and IP commercialisation through establishment of Intellectual Property Facilitation Centres (IPFCs) across the country.
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i) Scheme Objective
The objective of the Intellectual Property Rights Scheme is to improve the IP culture in India with the following interventions:
- To enhance the awareness of Intellectual Property Rights (IPRs) amongst the MSMEs and to encourage creative intellectual endeavour in Indian economy;
- To take suitable measures for the protection of ideas, technological innovation and knowledge-driven business strategies developed by the MSMEs for their commercialization and effective utilization of IPR tools.
ii) Eligibility
For MSMEs with UAM/Udyam Registration.
iii) Activities
- Establishment of Intellectual Property Facilitation Centres (IPFCs).
- Reimbursement for registration of Patent, Trademark, Geographical Indications (G.I.), Design through IPFCs.
iv) Nature of Assistance
Under the scheme, MSMEs can apply for reimbursement for the registration of Patent, Trademark, G.I. and Design through an application on the portal of the scheme. The application is reviewed by the IPFC and sent to the MSME ministry for approval. Post ministry’s approval, the reimbursement is made to MSME.
Reimbursement up to Rs 5 lakh is allowed for foreign patents and Rs 1 lakh for domestic patents, Rs 2 lakh for GI registration, Rs 15,000 for design registration and Rs 10,000 for trademark as a one-time support.
- A Grant of up to Rs. 1 crore would be provided to an IPFC in milestone-based (three or more) instalments
- Reimbursement for registration of Patent, Trademark, Geographical Indications (G.I.), Design: The maximum financial assistance/reimbursement to the eligible applicants under the IPR component is as follows:
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Interoperability Arrangements
The MSME Innovative scheme is designed by integrating three components of CLCSTUS (viz., Incubation, Design & IPR) schemes to create CHAMPIONS, where each component can have interoperability with other components during the phases of intervention to enhance capacities/capabilities of champion MSMEs. MSME can have opportunity to suitably interlink benefits among three components during the period/stage of implementation.
There are some options of various combinations like
a. Only Incubation OR Only Design OR Only IPR
b. Incubation-Design-IPR
c. Incubation-Design
d. Incubation- IPR
e. Design-IPR
MSME can apply for any one of the above combinations. The financial assistance will be applicable for availing the benefits as per the individual scheme component.
FAQs
Q 1 . What is MSME Innovative scheme?
Ans.MSME Innovative is a new concept for MSMEs with a combination of innovation in incubation, design intervention and by protecting IPR in a single mode approach to create awareness amongst MSMEs about India’s innovation and motivate them to become MSME Champions. This will act as a hub for innovation activities facilitating and guiding development of ideas into viable business proposition that can benefit society directly and can be marketed Successfully.
Q 2 How many components are there in MSME Innovative scheme ?
Ans. MSME Innovative scheme has 3 components :
Incubation
Design
IPR
INCUBATION COMPONENT
Q.1 What is the objective of Incubation Component ?
Ans : The main objective of this component is to promote and support untapped creativity and to promote adoption of latest technologies in MSMEs that seek the validation of their ideas at the proof-of-concept level. .
Q.2 Who are eligible Incubation scheme?
Ans : Any person as individual or MSME, having the innovative ideas are eligible to avail the benefits of this scheme. The person should have innovative sort of idea which can be converted into prototype and further in business activity. The person is being called Incubatee.
Q.3 How to take benefit of Incubation scheme?
Ans: The person (incubatee) should get attached with any Host Institute (HI) for nurturing of their idea in Business incubator (BI) being set up by HI.
Q.4 What is “Host Institute & Business Incubator”?
Ans: Host Institute (HI) : Institute which set up Business Incubator and provides the infrastructural and technical facilities for nurturing of new innovative ideas is called Host Institutes (HI).
Business Incubator (BI): A specific place/workshop located in HI having facilities for nurturing of idea of Incubatee is called Business Incubator.
Q.5 Who can become Host Institute(HI)?
Ans: Institutions such as Technical Colleges, Universities, other Professional Colleges/Institutes, R&D Institutes, NGOs involved in incubation activities, MSME-DIs/Technology Centres or any Institute/Organization of Central/State Government may apply for HI and set up a Business Incubator (BI).
Q.6 Role of Host Institutes?
Ans: Host Institutes will set up Business Incubator (BI) and provides the space, equipments, lab and all the auxiliary support to the incubatee for nurture of his ideas for the business activities.
Q.7How to become HI?
Ans: Eligible institutes can apply through online MIS only and submit details alongwith supporting documents. Details of documents and procedure to apply is given in guiding manuals available in MIS itself.
Q.8 Which states/UTs can participate in the Incubation scheme?
Ans : Incubatees and eligible institutes of all states/UTs can take benefit of the scheme.
However, Institutes in the North East Region will be given priority for supporting BIs.
Q.9 Which type of assistance /support incubate can get from BI?
Ans: Incubatee can get support from BI on all issues related to technology, innovation, mentor,plant & machinery required for nurturing of idea.
Q.10 Can incubaee take any technical support outside the BI?
Ans: If any facilities of plant & machinery which are essential for nurturing of idea and same arenot available in HI/BI , then incubate can utilize the facilities of machines available in otherplaces . Incubatee can utilize these facilities on pay as usage basis through HI/BI only.
Q.11 Who is approving authority of any proposals seeking financial assistance?
Ans: Project Monitoring and Advisory Committee (PMAC) headed by DC(MSME) is the final authority for approving proposal as per guidelines of scheme.
Q.12 What is the URL for online submission of proposal?
Ans: https://my.msme.gov.in/inc/
DESIGN COMPONENT
Q 1. What is the objectives of Design component?
ANS. The objective of this component is to bring Indian manufacturing sector and Design expertise/Design fraternity on to a common platform. It aims to provide expert advice and cost-effective solution on real time design problems for new product development, its continuous improvement and value addition in existing/new products.
Q 2 . What are the broad activities of design component MSME Innovative scheme?
Ans. The Design scheme is divided in two major parts, viz., Design Projects and Design Awareness Programme.
- Design Project – To facilitate MSMEs to develop new design strategies and or design related products through interventions and consultancy.
- Design Awareness Programme: The objective is to create general awareness and sensitization about the value and power of design for businesses through seminars, talks, workshops etc. The purpose of these activities is to sensitize MSMEs about the usage of design/innovation in various facets of their industry.
Q.3. Who can take the benefit of the scheme?
ANS. The beneficiary unit(s) must typically be a registered micro, small or medium enterprises as per the definition in MSMED and should have a valid UAM or Udyam Registration. The manufacturing MSMEs may be a profitable entity preferably in the last 1 year of its operations.
Q 4 . Who will implement the scheme throughout the country?
ANS. The implementing agencies for the Scheme, presently, are:
Indian Institute of Science (IISc), Bengaluru, IITs (Kanpur, Indore, BHU, Roorkee, Ropar, Bhubaneshwar),NITs (Tiruchirappalli, Warangal, Silchar, Arunachal Pradesh, Jaipur, Allahabad, J&K, Bhopal, Nagpur,Calicut, Kurukshetra, Surathkal, Raipur).
Q.5. What will be the role and responsibilities of the Implementing Agency (IA)?
Ans. All the proposals received on the MSME Innovative Portal under Design component will be evaluated by the respective IA . Upon receipt of the application, the IA will conduct a preliminary screening and may seek clarification or supplementary information from both the applicant design Consultant/company and applicant MSME. After screening, IA will submit the application together with its recommendation to Project Monitoring & Advisory Committee (PMAC) for consideration.
Q 6. How the proposals may be submitted ?
Ans. Under MSME Innovative scheme, a MSME Innovative portal has been developed. Now all the proposals/ application will uploaded on the Innovative portal i.e (https://innovative.msme.gov.in) under the respective scheme component of MSME Innovative scheme.
IPR COMPONENT
Q 1.- What is Intellectual Property (IP)?
Intellectual property (IP) refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.
IP is divided into two categories: Industrial property, which includes inventions (patents),trademarks, industrial designs, and geographic indications of source; and Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs. Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs.
Q 2.- What are the Types of Intellectual Property Rights?
- Patents
- Copyrights
- Trademark
- Industrial Designs
- Geographical Indications
- Trade Secrets
Inventions (patents), trademarks, industrial designs, and geographical indications are referred to as Industrial property.
Q 3.- What is patent?
A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem. In order to be patentable, the invention must fulfil certain conditions.
Q 4.- What are the Benefits of Patents Registration :
Exclusive Right- allows to use and exploit the invention for 20 years from date of filling.
Strong Market position-prevent other from commercially using patented invention thereby
reducing competition, Higher returns on investment, Opportunity to license or sell the invention.
Positive image of enterprise
Q 5.- What is Copy Rights ?
A- Copyright is a legal term describing rights given to creators for their literary and artistic works. The kinds of works covered by copyright include: literary works such as novels, poems, plays, reference works, newspapers and computer programs; databases; films,musical compositions, and choreography; artistic works such as paintings, drawings,photographs and sculpture; architecture; and advertisements, maps and technical Drawings.
Q 6.- What are the benefits of Copy Right Registration ?
Copyright is the body of law that grants authors, artists & other creator’s protection fortheir literary and artistic creations, which are referred to as Works.
Copyright protection (other than photographs) is for life of author plus sixty years after his death.
Q 7.- What is Trademarks?
A trademark is a distinctive sign which identifies certain goods or services as those produced or provided by a specific person or enterprise.
Q 8.- What are the Benefits of Trademarks Registration?
Helps consumer identify and purchase a product or service because it’s nature & quality, indicated by it’s unique trademark, meets their needs.
Registration of its trademark is prima facie proof of its ownership giving statutory right to the proprietor.
Trademark rights may be held in perpetuity. The initial term of registration is for 10 years; thereafter it may be renewed from time to time.
Q 9.- What is Industrial Designs?
An industrial design is the ornamental or aesthetic aspect of an article. The design may consist of three-dimensional features, such as the shape or surface of an article, or of two-dimensional features, such as patterns, lines or color. Industrial designs are applied to a wide variety of products of industry and handicraft: from technical and medical instruments to watches, jewellery, and other luxury items; from house wares and electrical appliances to vehicles and architectural structures; from textile designs to leisure goods.
Q 10 – What are the Benefits of Industrial Design Registration?
Designs can be protected through registration, the objective is to protect new/ original designs so created to be applied or applicable to particular article to be manufactured by industrial process or means.
Q 11. – What are the activities /Benefits under IPR components of MSME-Innovative Scheme of M/o MSME?
- Reimbursement of Patent/ GIs/Trademarks/Design
- Setting up of ‘IP Facilitation Centre for MSME’.
Q.12.- Whether there is any centre to support in counselling/ drafting & filing the Intellectual Property Rights?
Ministry of MSME has set up IP Facilitation Centres(IPFCs) for the aforesaid purpose
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