New Guidelines Of Micro And Small Enterprises Cluster Development Programme

The Government of India (GoI) has approved revisions to the Guidelines of Micro and Small Enterprises Cluster Development Programme (MSE-CDP). The same are in supersession of the guidelines on 11 October 2019.

Objectives Of Micro And Small Enterprises Cluster Development Programme

a. To enhance the sustainability, competitiveness and growth of MSEs by addressing common issues such as improvement of technology, skills and quality, market access, etc.

b. To build capacity of MSEs and Start-ups for common supportive action through integration of self-help groups, consortia, district Industry associations, etc.

c. To set up Common Facility Centres in Industrial areas (for testing, training centre, raw material depot, effluent treatment, complementing production processes).

d. Promotion of green and sustainable manufacturing technology for the clusters so as to enable units to switch to sustainable and green production processes and products.

Common Facility Centers (CFCs) For Micro And Small Enterprises Cluster Development Programme

The GoI grant will be restricted to 70% of the cost of the project from Rs. 5.00 crore to Rs. 10.00 crore and 60% of the cost of project from Rs. 10.00 crore to Rs. 30.00 crore. In case of North East and Hill States, Island territories, Aspirational Districts, GoI grant will be 80% of the cost of project from Rs.5.00 crore to Rs. 10.0 crore and 70% of the cost of the project from Rs. 10.00 crore to Rs. 30.00 crore. The project for CFC with project cost more than Rs. 30.00 crore can also be considered but the GoI assistance would be calculated by taking into account the maximum eligible project cost of Rs. 30.00 crore.

Infrastructure Development For Micro And Small Enterprises Cluster Development Programme

The GoI grant will be restricted to 60% of the cost of the project from Rs. 5.00 crore to Rs. 15.00 crore for setting up of new Industrial Estate/Flatted Factory Complex and GoI grant will be 50% of the cost of project from Rs. 5.00 crore to Rs. 10.00 crore for up-gradation of existing Industrial Estate/Flatted Factory Complex. In case of North East and Hill States, Island territories, Aspirational Districts, GoI grant will be 70% of the cost of the project from Rs. 5.00 crore to Rs. 15.00 crore for setting up of new Industrial Estate/Flatted Factory Complex and 60% of the cost of project cost from Rs. 5.00 crore to Rs. 10.00 crore for up-gradation of existing Industrial Estate/Flatted Factory Complex. The project for ID with project cost more than Rs. 10.00 crores/15.00 crore can be considered but the GoI assistance would be calculated by taking into account the maximum eligible project cost of Rs. 10.00 crore/15.00 crore.

Implementing Agencies For Micro And Small Enterprises Cluster Development Programme

Implementing agencies, Components and Implementing Agency/Fund Receiving Agency

a.   Setting up of CFC Component - The implementing agency/fund receiving agency can be:

• Institutions of Ministry of MSME (MSME-DIs, NSIC, KVIC, Coir Board, Technology Centres, NI-MSME and MGIRI)
• organisations of State Governments
• National and international institutions engaged in development of the MSE sector
• Any other institution/agency approved by the Ministry of MSME

b. Infrastructure Development Projects - The implementing agency/fund receiving agency can be:

• State/UT Governments through an appropriate State Government/UT Agency/Integrated Industrial Park Development Agency/State Industrial Development Agency.

Steering Committees For Micro And Small Enterprises Cluster Development Programme

1. DPR (Detailed Project Report) should be appraised by any branch of SIDBI (Small Industries Development Bank of India) or any commercial bank. The techno economic feasibility report of the bank and DPR would be placed before the SLSC.

2. State Level Steering Committee (SLSC)

• Each State Government is required to constitute a State Level Steering Committee under the Chairmanship of ACS/Principal Secretary/Secretary (Industries/MSME) and consisting of representatives of all stakeholders. The State Level Steering Committee would examine the DPRs recommendation and monitor implementation and operation of approved Projects in the State to ensure satisfactory and time-bound implementation of the activities and operations thereafter.
• The State Level Steering Committee shall consist of ACS/Principal Secretary/Secretary (Industries/MSME) as Chairman, Commissioner/Director of Industries/MSME as Co Convener; Managing Director or Representative of Implementing Agency as Member; Representative of Finance Department as Member; Director MSME-Development Institute as Member/Secretary Convener; General Manager, Concerned District Industries Centre as Member.
• Special invitees (if any) like representative of SIDBI or any financial institution or any official required for the purpose as Member;
• A representative from Technical Institution/MSME-Technology Centres of M/o MSME as Member

3.  The proposal, once recommended by the State Level Steering Committee, would be forwarded by concerned MSME-DI online with its recommendations before the same is considered in Office of DC, MSME. If the SLSC fails to recommend or reject a proposal within the stipulated time for recommendation. The proposal will be treated as deemed recommended by the SLSC. However, on the request of the State Government/MSME-DI, AS&DC (MSME) may allow relaxation in time not exceeding 3 months, for submission of recommendations of SLSC.

4. SLSC may act as a single window for all the clearances required for the project. Director (Industries) may be nominated as the nodal officer for such clearances.

5. There shall not be any In-principle approval of any project. Either a project would be approved or not approved.

6. The proposals for projects with no State Government funding support, may be directly submitted to O/o DC-MSME after due examination by MSME-DIs for final approval. However, recommendation of SLSC would be required and State may record about their no contribution to the project.

7. The project costing up to Rs. 5 crore will be considered under SFURTI (Scheme of Fund for regeneration of Traditional Industries).

8. Under the Infrastructure Development, link infrastructure connecting the private industrial estate to the main road can also be considered provided it is recommended by the State Level Screening Committee.

9. For promoting rural industries in agro-processing, FPO (Farmer Producer Organisation Scheme) will also be permitted under the scheme.

10. In order to provide industrialisation in rural areas, preference may be given for those projects which are located in gram panchayats or municipal areas, North Eastern Regions and aspirational districts as identified by NITI Aayog.

10. The CFC projects under the "one district-one product" theme will also be given preference.

National Project Approval Committee (NPAC) For Micro And Small Enterprises Cluster Development Programme

The projects recommended by SLSC will be placed before NPAC for consideration and approval. The committee shall meet at least every two months. The composition will be Secretary (MSME) as Chairman, AS&DC (MSME) as Member; Adviser (VSE), NITI Aayog as Member; Joint Secretary (ARI), Ministry of MSME as Member; Economic Adviser (EA)/IFW as Member; Additional Development Commissioner/JS/DDG of the Cluster Division as Member Secretary; Representative of SIDBI as Member; Representative of CSIR as Member; Representative of NSIC/KVIC as Member; Representative(s) of DPIIT, MoTextile, DoPharma, MeitY, MoRD, MoFPI, MoDefence, DoFisheries, DoAnimal Husbandry and Dairying as Member; Director, MSME-DI concerned as Member; Principal Secretary/Secretary (Industries/MSME)/Commissioner/Director of Industries/MSME of the State Government as Special Invitees; Representative(s) of concerned Industry Association(s), Representative from Financial Institution, Programme Management Service Provider, Appraisal Agencies etc. as Special Invitees and Director (CD) as Member.

Project Approval Procedure/Documents Required For Micro And Small Enterprises Cluster Development Programme

Documents required for placing a proposal of Infrastructure Development (ID) Projects for final approval of NPAC:

a. DPR

b. Project Appraisal Report

c. Registered land documents (if in vernacular language then English/Hindi translation)

d. SPV registration as Section 8 Company (certificate of registration along with MoA and AoA)

e. Geo Tagging

f. SLSC recommendation along with minutes of meeting

g. Statutory Compliances

h. Certificate from State Government for compliance of GFR/CVC guidelines.

Monitoring and Evaluation Micro And Small Enterprises Cluster Development Programme

a. The existing digital portal of the scheme would be revamped to bring total digitisation of different stages of the journey of the project and information to be placed in public domain to enhance transparency. Photographs of the scheme workflow including application submission for MSE CDP proposals (both CFC and Infrastructure Development), uploading of In-principle approvals by States, Application routing to desired Bank branch, uploading of sanction letter by Banks, final approval order by Ministry, marking of disbursement by Banks, etc. The portal should also be used to map all the clusters in the country.

b. Geo-tagging of all CFC and Infrastructure Development projects will be mandatory.

c. The timeline for the completion of various activities are given. MSME-DIs will closely monitor the progress of the projects in accordance with the prescribed timeline. Any delay should be taken up pro-actively with the State/Government/Implementing Agency under intimation to the Office of DC (MSME).