CENTRAL GOVERNMENT 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)”
Objectives
The MSE-CDP scheme aims to enhance the sustainability of Micro and Small Enterprises (MSEs) by addressing common challenges such as technology upgradation, skill development, quality improvement, market access, and access to capital. It emphasizes capacity building by facilitating the formation of self-help groups, consortia, and the upgradation of industry associations to support collective actions. The scheme also focuses on infrastructure development, creating or upgrading facilities in new or existing industrial areas and clusters of MSEs. Additionally, it promotes the establishment of Common Facility Centres (CFCs) that provide shared resources for testing, training, raw material storage, effluent treatment, and other complementary production processes. Moreover, the scheme encourages the adoption of sustainable and eco-friendly manufacturing technologies to promote green manufacturing practices.
Components of the Scheme
- Setting up of Common Facility Centres (CFCs): These centres provide shared services such as testing, training, raw material storage, and effluent treatment, which are essential for the cluster’s development.
- Infrastructure Development (ID): Focuses on developing infrastructure in new or existing industrial 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, State Government contributes 20%, and SPV contributes 20%.
- In special regions like North Eastern Region (NER), Hill States, and Island Territories, the GoI’s contribution can be up to 80% for projects costing between ₹5 crore to ₹10 crore.
- Infrastructure Development (ID):
- 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 ₹10 crore.
- 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 service activities and have valid Udyam Registration.
- Special Purpose Vehicles (SPVs): Legal entities formed to implement cluster development projects. 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 infrastructure development projects.
Applicability:
MSE–CDP policy will be valid for a period of 5 years from the date of notification or till the time any new policy/amendment is introduced by Government of India, whichever is later (2021-22 to 2025-26)
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