Entrepreneurship Development

ENTREPRENEURSHIP DEVELOPMENT FOR RURAL FAMILIES 4(1+3)

Lesson 9 : NSIC-Schemes for promoting entrepreneurship development

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

1. 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

1. Soft Interventions includes capacity building activities in the cluster where no fixed assets is acquired or formed. Soft interventions include
   
1. Diagnostic study
   
2. Forming association-Trust building & Developing Identity
   
3. Capacity building,
   
4. Organizing workshops, seminars,
   
5. Training & Exposure visits,
   
6. Market development,
   
7. Launch of Website,
   
8. Common procurement,
   
9. 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.

2. Hard Interventions – Hard interventions, inter alia, include
   
1. Setting up of Common Facility Centre (CFCs),
   
2. Mini tool room
3. Design centre
   
4. Testing facilities
   
5. Training centre
   
6. R&D centre
   
7. Common raw material bank/sales depot, etc.
   
8. 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.

2. Creation of physical infrastructure:
   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

1. 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.
2. 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.