SCHEME ON “THE MICRO & SMALL ENTERPRISES CLUSTER DEVELOPMENT PROGRAMME (MSE-CDP)”
Dear Businessman/Investors,
In Series of KIP: Business and Subsidy Update, today we are going to share with you benefit of the Central Government Scheme on “THE MICRO & SMALL ENTERPRISES CLUSTER DEVELOPMENT PROGRAMME (MSE-CDP)”
Objective:
The MSE-CDP scheme aims to enhance the sustainability of Micro and Small Enterprises (MSEs) byaddressing common challenges such as technology upgradation, skill development, qualityimprovement, market access, and access to capital. It emphasizes capacity building by facilitatingthe formation of self-help groups, consortia, and the upgradation of industry associations tosupport collective actions. The scheme also focuses on infrastructure development, creating orupgrading facilities in new or existing industrial areas and clusters of MSEs. Additionally, itpromotes the establishment of Common Facility Centres (CFCs) that provide shared resources fortesting, training, raw material storage, effluent treatment, and other complementary productionprocesses. Moreover, the scheme encourages the adoption of sustainable and eco-friendlymanufacturing technologies to promote green manufacturing practices.
Components of the Scheme :
- Setting up of Common Facility Centres (CFCs) : These centres provide shared services such astesting, training, raw material storage, and effluent treatment, which are essential for thecluster’s development.
- Infrastructure Development (ID) : Focuses on developing infrastructure in new or existingindustrial estates, including flatted factory complexes, to support the growth of MSEs.
Financial Assistance :
- Common Facility Centres (CFCs) : Projects costing between ₹5 crore to ₹10 crore: Government of India (GoI) provides 70%funding, State Government contributes 20%, and the Special Purpose Vehicle (SPV)contributes 10%.
- Projects costing between ₹10 crore to ₹30 crore: GoI provides 60% funding, StateGovernment contributes 20%, and SPV contributes 20%.
In special regions like North Eastern Region (NER), Hill States, and Island Territories, theGoI’s contribution can be up to 80% for projects costing between ₹5 crore to ₹10 crore. - Infrastructure Development (ID) :
- Consult With Experts
For new developments: GoI provides 60% funding for projects costing between ₹5 crore to₹15 crore.
For upgradation: GoI provides 50% funding for projects costing between ₹5 crore to ₹10crore.
Enhanced subsidies are available for special regions, similar to the CFC funding pattern.
Eligibility Criteria :
- Micro and Small Enterprises (MSEs) : Must be engaged in manufacturing, processing, or serviceactivities and have valid Udyam Registration.
- Special Purpose Vehicles (SPVs) : Legal entities formed to implement cluster developmentprojects. SPVs can be: Section 8 companies (under the Companies Act, 2013)
- Cooperative societies
- Registered societies
- Trusts
- Farmer Producer Organizations (FPOs) or
- Farmer Producer Companies (FPCs)
- State Governments and
- State Government Agencies : Eligible to apply for infrastructuredevelopment projects.
Applicability:
- MSE : CDP policy will be valid for a period of 5 years from the date of notification or till the time anynew policy/amendment is introduced by Government of India, whichever is later ( 2021-22 to 2025-26)
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