- Existing Clusters:
- A cluster is defined as a group of enterprises, ideally having 100 members, producing same/similar products/services.
- While 100 members could be the minimum per cluster, depending on the density of population and other factors, even 200-300 could be a good target group for undertaking Diagnostic Study and the subsequent Soft Interventions in a cluster.
- However, in difficult and backward regions the target numbers could come down to 50 or less, but it should not be too small as a lot of Government expenditure is made per cluster.
- The Cluster Development Programme (CDP) being implemented envisages diagnostic study of identified clusters of traditional skill-based MSEs to identify appropriate technologies and their providers and to facilitate adoption of available technology meeting the specific needs of the end users.
- The Cluster Development aims at enhanced competitiveness, technology improvement, adoption of best manufacturing practices, marketing of products, employment generation etc.
- The scheme provides assistance for capacity building, common facilities, marketing etc. the delivery, assimilation and diffusion of the identified technology from its producers to the recipient user/cluster of small enterprises.
Type of interventions
Creation of physical infrastructure:
- Soft Interventions includes capacity building activities in the cluster where no fixed assets is acquired or formed. Soft interventions include
- Diagnostic study
- Forming association-Trust building & Developing Identity
- Capacity building,
- Organizing workshops, seminars,
- Training & Exposure visits,
- Market development,
- Launch of Website,
- Common procurement,
- Common/complementary sales and branding;
In the past depending upon the type of cluster, assistance available for soft interventions has varied in the range of Rs 25 – 35 lakh per cluster. Currently there is an internal ceiling of Rs.10 lakh for soft intervention under this Scheme.
- Hard Interventions – Hard interventions, inter alia, include
- Setting up of Common Facility Centre (CFCs),
- Mini tool room
- Design centre
- Testing facilities
- Training centre
- R&D centre
- Common raw material bank/sales depot, etc.
- Display/Exhibition centre
In case of the hard intervention the contribution from the M/o MSME varies between 30-80% of the total project cost, but in the case of clusters owned and managed by women entrepreneurs , contribution of the M/o MSME could be up to 90% of the project cost.
This Ministry implemented this Scheme to provide develop sites with infrastructural facilities like power distribution network, water, telecommunications, drainage and pollution control facilities, roads, exhibition/display centres, raw materials, storage and marketing outlets, common service facilities and technological back-up services, etc. This scheme has been included in the MSME-Cluster Development Programme. All the features of IID Scheme have been retained.
To create physical infrastructure exclusively for women owned enterprises, central grant of 40% of the project cost subject to a maximum of Rs 2 crore is available. The Ministry of MSME is making efforts to enhance the quantum of grant to 80% in a project of Rs.10 crore.
Operationalisation of the Scheme
- A Cluster Development Executive (CDE) is required for executing and monitoring all soft interventions in a cluster. Normally, a CDE can be a DIC Officer/MSME-DI officer/retired expert or even hired person from Non-Government Sector.
- The hard interventions in a cluster and creation of physical infrastructure require setting up a user’s body/special purpose vehicle which could be society/trust/company to be formed by the cluster beneficiaries.