IndiaFilings / Learn / Business Startup / Msme Cluster Development Programme
MSME Cluster Development Programme - IndiaFilings

MSME Cluster Development Programme

The Ministry of Micro, Small and Medium Enterprises (MSMEs) has adopted the MSME Cluster Development Programme with the objective of enhancing the productivity, competitiveness, collectiveness, and capacity building of Micro and Small Enterprises (MSEs) in the country. In this article, we look at the MSME Cluster Development Programme in detail.

What are Clusters?

The term ‘cluster’ in this context refers to a group of enterprises located within an identifiable and mostly practicable, contagious area, producing similar products or services. Enterprises in a cluster are essentially similar or complementary in their methods of production, quality control and testing, energy consumption, pollution control, etc. They use similar levels of technology and marketing strategies/practices, similar channels for communication, and follow common challenges and opportunities among the members of the cluster.

Need for the Initiative

The MSME sector contributes substantially to the Nation’s economical and employment prospects. Micro, Small, and Medium may be the term, but the role it plays is in sharp contrast to this description. Statistics suggest that India is home to 26 million (and increasing) MSMEs, employing 60 million people, of which 70% are estimated to be concentrated in around 1086 urban industrial clusters. For these clusters to flourish, they need to be appropriately upgraded. Such upgradation is sought to be rendered through this programme. Also Read About - MSME Samadhaan

Objectives of the Programme

This programme is envisioned to:
  • Support the sustainability and growth of MSEs by enhancing the technology, skills and quality, market access, access to capital, and other related aspects.
  • Build the capacity of MSEs for common supportive action through the formation of self-help groups, consortia, upgradation of associations, etc.
  • Create or upgrade infrastructural facilities in new or existing industrial areas/clusters of MSEs, including the setting up of Flatted Factory Complexes.
  • Form common facility centres to serve the purposes of testing, training centre, effluent treatment, complementing production processes, etc.

Components Proposed

The programme would be implemented on the basis of the following target components:

Setting up of CFCs

This component involves the creation of tangible assets as Common Facility Centres (CFCs), the likes of which include Common Production/Processing Centre, Design Centres, Testing Facilities, Training Centre, R&D Centres, Effluent Treatment Plan, Marketing Display/Selling Centre, Common Logistics Centre, Common Sales Depot, etc. For this purpose, the Government of India would sponsor a maximum of 70% of the cost of the project, (for projects costing up to Rs. 15 crores). A grant of up to 90% could be availed by Northeastern and Hilly States, and clusters which are majorly (more than 50%) owned by:
  • Microenterprises
  • Women
  • SC/ST units

Development of Infrastructure

This component comprises of projects for upgradation of infrastructural facilities such as power distribution network, telecommunication, drainage and pollution control facilities, roads, banks, marketing outlets, common service facilities and technological backup services for MSEs located in new/existing industrial estates/areas. For this purpose, the Government of India would grant as high as 60% of the cost of the project (for projects of Rs 10 crores). An 80% grant would be provided for projects in North Eastern and Hilly States, as well as for the industrial areas/estates which comprises of units majorly owned by:
  • Microenterprises
  • Women
  • People associated with SC/ST community

Project Deliverables

The following are the deliverables of the project, as specified by the Ministry:
  • Skills training in the nature of familiarization to end users.
  • A study on the status of technology and the needs of it
  • Kits for the purpose of demonstration in the nature of benign catalyst.
  • The setting up of common facility centre/demonstration plants.
  • Provision of escort services to the end users for availing loans and arranging funds.
  • Provision of user manual and guides for specific purposes.
  • Project documentation.
  • Provision of auxiliary benefits in the form of market and product assessment.

Application for Enrollment

MSME Clusters can partake in the initiative by filing an application through online or offline means. While physical applications can be addressed through any of the State Governments/their autonomous bodies/field institutes of the Ministry of MSME-Dis, online applications can be filed by furnishing their details on the online application form of the website created for this programme.
SREERAM VISWANATH K
Updated on: December 17th, 2019

Popular Post

Download ePAN Card – Get ePan from NSDL & UTIITSL
80 Small Business Ideas

Starting a small business can be a transformative venture, offering the exciting opportunity...

Nadakacheri – Income Caste Certificate Download Online in Karnataka
TDS Rate Chart for Financial Year 2025-2026 (Assessment Year 2026-2027)

Tax deduction at source, shortly and popularly known as TDS, was introduced by the Income Tax...

Divorce Rules in India: Everything You Need to Know
How To Download GST Registration Certificate Online?

Goods & Services Tax Certificate is issued to people who are registered under GST...

PAN Card Cancellation Online
Find Complete Details of GST Registration Procedure

GST registration applies to all individuals and entities supplying goods or services in India. GST...

Check Your PF Claim Status Online Using PF Tracking ID
Gift Tax in India: Applicability, Exemptions and Rules

Gift tax in India is applied when the value of the received gift exceeds ₹50,000 in the...

Check Your PF Claim Status Online Using PF Tracking ID
Old Regime vs New Regime 2025: Which Tax Regime is Better for You?

The Union Budget 2025 has brought significant changes to India’s personal income tax structure, raising the...

Check Your PF Claim Status Online Using PF Tracking ID
What is the minimum turnover for GST?

The Goods and Services Tax (GST) is an indirect tax system introduced in India in 2017. It functions...

Check Your PF Claim Status Online Using PF Tracking ID
How can I check if a trademark is registered?

A trademark search is simply checking if another person or organization does not already own the...

Check Your PF Claim Status Online Using PF Tracking ID
Section 194H of the Income Tax Act: TDS on Commission & Brokerage

Section 194H of the Income Tax Act in India mandates the deduction of Tax at Source (TDS) on commission or brokerage...

Check Your PF Claim Status Online Using PF Tracking ID
Section 80G Deduction - Income Tax Act

Section 80G Deduction is a facility available in the Income Tax Act which allows taxpayers to...

Check Your PF Claim Status Online Using PF Tracking ID
Crypto Tax in India: Taxation On Cryptocurrency

The Income Tax Department (ITD) has not provided specific guidance on crypto taxes for Indian investors. However...

Check Your PF Claim Status Online Using PF Tracking ID
Internal Audit Applicability Under Companies Act, 2013

Internal audit applicability is a critical concept for companies in India, impacting various...

Check Your PF Claim Status Online Using PF Tracking ID
Difference between Private and Public Company

In the business world, two main types of companies exist: private company and public company...

Check Your PF Claim Status Online Using PF Tracking ID
New GST Rules for Rent

Ministry of Finance vide a Notification No 05/2022- Central Tax (Rate) dated 13.7.2022 has issued...

Check Your PF Claim Status Online Using PF Tracking ID
GSTR-1 and GSTR-3B Due Date Extension - New Due Dates For January 2025

The Central Board of Indirect Taxes and Customs (CBIC) has recently announced an extension...

Check Your PF Claim Status Online Using PF Tracking ID
Different Depreciation Rates under Companies & Income Tax Act

Depreciation is a key concept in finance and accounting. It helps us manage how the value of...

Check Your PF Claim Status Online Using PF Tracking ID
Form 10IA - Section 80DD Deduction

Form 10IA of the Income Tax Department must be filed by taxpayers claiming income tax deduction...

Check Your PF Claim Status Online Using PF Tracking ID
GST on Used Cars: New 18% Tax Rate Explained

The Goods and Services Tax (GST) system in India has been a significant reform in the country's...

Check Your PF Claim Status Online Using PF Tracking ID
MSME Registration - Udyam Registration

India's Gross Domestic Product (GDP) benefits significantly from the substantial...

Check Your PF Claim Status Online Using PF Tracking ID
Section 43B(h) - New MSME 45 Days Payment Rule

The Finance Act, 2023 introduced the MSME 45-day payment rule under Section 43B(h) of the Income Tax Act...

Check Your PF Claim Status Online Using PF Tracking ID
Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024

The Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024, was announced by Union Finance Minister...