In October 2007, the erstwhile cluster development scheme ‘Small Industries Cluster Development Programme (SICDP)’ was renamed as ‘Micro and Small Enterprises – Cluster Development Programme (MSE-CDP)’. The schemes comes under the Ministry of Micro, Small, and Medium Enterprises (MSME), Government of India (GoI).
Also don’t miss msmetalk podcast for informative topics , on which we bring experts from the Industry to give value addition guidance to scaleup and build long lasting businesses. Micro & Small Enterprises – Cluster Development Programme (MSE-CDP)
“Cluster” is the group of organizations or enterprises that fall into the same category based on their services or products. The clusters are classified based on the types of services or products the enterprise sells to the customers. The MSME cluster development initiatives have been initiated to ensure the higher impact of MSMEs on local and non-local markets, including global markets.
The primary aspect by which the enterprises are formed into clusters are as follows:
- They have similar opportunities and challenges.
- The channels for communication under a cluster are similar.
- Marketing and technological strategies are the same.
- Pollution control, energy consumption, quality control and testing, methods of production, etc are similar.
There are six major clusters in India, including Hooghly Industrial Belt, Mumbai-Pune Industrial Region, Ahmedabad-Vadodara Region, Madurai-Coimbatore-Bengaluru Region, Agra-Mathura-Meerut, Saharanpur belt, and finally, Faridabad-Gurgaon-Ambala Belts
Objectives of MSME Cluster Development
The MSME cluster development has been initiated majorly to ensure the following things to the micro and small businesses.
- To support the growth and welfare of MSEs (Micro and Small Enterprises) by providing distinct technology, tool up-gradation, skill development, market access, quality enhancement, etc.
- To upgrade the infrastructure amenities in the emerging and existing industrial sectors.
- To form the specific centres for SMEs to enhance testing, training centres, and production processes.
- To form self-help groups, associations, etc., ensuring support to micro and small businesses for taking supportive action in case of emergencies.
Impact of Covid-19 pandemic on MSME sector and various initiatives of government such as Atma Nirbhar Bharat Abhiyan, Vocal for local to Global and Zero effect to Zero defect to boost indigenous manufacturing and industry has started a new interest in this scheme.
Latest revisions made in the scheme:
The Office of the MSME Development Commissioner in consultations with MSME-Development Institute, Special Purpose Vehicle and state governments suggested :
- To bring simplification in the scheme guidelines.
- To reduce layers of various processes.
- Reduce the time required for approval of the projects.
- Revamping the digital portal to digitise the whole project for better execution.
The government has approved revised guidelines of its key scheme for cluster development – Micro and Small Enterprises-Cluster Development Programme (MSE-CDP) to be implemented during the 15th Finance Commission cycle – FY22-FY26.
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Components Proposed
The programme would be implemented on the basis of the following target components:
Setting up of CFCs
This component involves the creation of tangible assets as Common Facility Centres (CFCs), the likes of which include Common Production/Processing Centre, Design Centres, Testing Facilities, Training Centre, R&D Centres, Effluent Treatment Plan, Marketing Display/Selling Centre, Common Logistics Centre, Common Sales Depot, etc. For this purpose, the Government of India would sponsor a maximum of 70% of the cost of the project, (for projects costing up to Rs. 15 crores). A grant of upto 90% could be availed by Northeastern and Hilly States, and clusters which are majorly (more than 50%) owned by:
- Microenterprises
- Women
- SC/ST units
Development of Infrastructure
This component comprises of projects for upgradation of infrastructural facilities such as power distribution network, telecommunication, drainage and pollution control facilities, roads, banks, marketing outlets, common service facilities and technological backup services for MSEs located in new/existing industrial estates/areas. For this purpose, the Government of India would grant as high as 60% of the cost of the project (for projects of Rs 10 crores). An 80% grant would be provided for projects in North Eastern and Hilly States, as well as for the industrial areas/estates which comprises of units majorly owned by:
- Microenterprises
- Women
- People associated with SC/ST community
Project Deliverables
The following are the deliverables of the project, as specified by the Ministry:
- Skills training in the nature of familiarization to end users.
- A study on the status of technology and the needs of it.
- Kits for the purpose of demonstration in the nature of benign catalyst.
- The setting up of common facility centre/demonstration plants.
- Provision of escort services to the end users for availing loans and arranging funds.
- Provision of user manual and guides for specific purposes.
- Project documentation.
- Provision of auxiliary benefits in the form of market and product assessment.
Latest Data on number of Common facility Centres and Infrastructure developments projects:
Source: https://msme.gov.in
How to Apply for MSME Cluster Development?
Small businesses can avail of Cluster Development either by applying online or offline. Visit the nearby government authorities or autonomous bodies for offline application. In comparison, you can avail and apply online applications effortlessly by visiting the official website. All you need to do is fill the Cluster Development application form and submit it.
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