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Cluster Development Program for MSMEs – Business Consortium can get assistance up to 15 Cr


Micro & Small Enterprises Cluster Development Programme (MSE-CDP)

Ministry of Micro, Small and Medium Enterprises (MSME) is providing clusters to enhance the productivity and competiveness and enhanced capacity along with collectiveness of MSMEs. It simply means that different units will be working under the one roof. It aims to provide upgraded infrastructural facility in the new or existing industrial areas/cluster MSMEs. It also provides common facility centres for testing, training centres, raw material depots, completing production processes, etc.

Financial Assistance

Government of India (GoI) provides financial assistance in four stages:

  1. Diagnostic Study Report (DSR)

The first task in developing a cluster is to conduct a diagnostic study. The objective of conducting this study is to prepare a comprehensive report which should include SWOT analysis, opportunities, problems, technology, marketing, suggestions, in short depth analysis. There should be a detailed well drawn out plan showing how it will enhance the competiveness of the units of the clusters to position the cluster on a self-sustaining growth trajectory.

GoI provides grant up to maximum INR 2.50 lakh for the preparation of DSR. DSR for one cluster should be prepared in 3 months and it can be further extended with the approval of DC (MSME).

  1. Soft Interventions

This program would consist of activities which lead to job creation, awareness, motivation, counselling, training on technology upgradation and other such activities. The important highlights of this program has been summarized below:

  • Minimum 25 units should be participating in one cluster developing programs. However, for difficult regions and backward regions, the minimum limit is only 20.
  • Maximum financial assistance for this program is INR 25 lakh per cluster. GoI provides 75% of the sanctioned amount of the project cost. However, for the North East and Hilly states, GoI would provide 90% of the project cost provided that the cluster has more than 50% of micro/village/women owned/SC/ST Units.
  • The share of cluster beneficiaries can be as high as possible but it should be not less than 10% of costs of the Soft Interventions. The gap funding will be provided by state government or other institutions.
  • The funds will be released in two or three instalment depending on the requirement of funds.
  • The duration of this program is 18 months, however, it can be extended by the approval of Steering Committee.
  1. Detailed Project Report

A GoI grant of maximum INR 5 lakh will be provided for preparation of a technically sound and financially feasible project report. The report should describe – setting up of a common facility center for cluster of MSE units or infrastructural development project and upgradation of an existing of cluster.

  1. Hard Interventions (setting up of CFCs)

The program will consist of creation of tangible assets as Common Facility Centres (CFCs) – creating a collective centre which can’t be provided by a single unit such as Common Production/Processing Units. The main highlights of this program are:

  • The GoI will provide maximum up to INR 15 Cr or 70% of the total cost of the project. GoI grant will be 90% for North eastern and hilly states clusters program.
  • Funds will be released in two or three instalments.
  1. Infrastructure Development

The GoI will provide maximum up to INR 15 Cr for development of infrastructure facilities existing or new cluster units. Under this program the projects considered would be power distribution network, water, telecommunication, drainage, pollution control facilities, road, banks, drainage, etc.

Who can apply?

  • Industrial Association
  • Existing Clusters or New Clusters
  • Consortium

How to Avail:

Online forms are available. To apply online, CLICK HERE

For more information, CLICK HERE

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