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Scheme for Entrepreneurial and Managerial Development of SMEs

Scheme for Entrepreneurial and Managerial Development of SMEs

Scheme for Entrepreneurial and Managerial Development of SMEs

Micro and Small Enterprises (MSEs) are considered as important constituents of national economies, that efficiently contribute to the employment expansion and poverty reduction. The Central and State Governments have been implementing various schemes and programmes for the promotion and development of such enterprises. These measures were taken after recognising the importance of micro and small enterprises that contribute to the nation’s industrial production, exports, employment and creation of entrepreneurs. Let us take a closer look at the scheme in this article.


The main objective of the scheme is to promote emerging technological and knowledge-based innovative ventures that require enhancing ideas from professionals. These ideas are developed in a supportive environment before they are utilised for venture capital. It also promotes networking and forging on linkages with other constituents of the innovation chain for commercialisation of their developments. This initiative has been taken up the Ministry of MSME, the nodal Ministry for the development of entrepreneurship and creation of self-employment and employment avenues.

Implementing Agencies

The incubation support is provided by Host Institutions namely

  • Indian Institutes of Technology (IITs)
  • National Institutes of Technology (NIITs)
  • Engineering colleges
  • Technology Development Centres, tool rooms, etc.
  • Other recognised R&D/Technical Institutes/centres, Development Institutes of DIP&P in the field of paper, rubber, machine tools etc.

The geographical regions, the disciplines and the infrastructure-providers that are listed will be reviewed at the time of implementation.


In every Business Incubator, efforts will be made to attain the ratio of 4:1 between the incubated micro and small enterprises. It is also permissible to have more than one Business Incubators (BI) in the same host Institution.

Financial Assistance

The authority has decided to set up 100 Business Incubators to incubate 1000 ideas, that results in establishing Small and Micro Enterprises at the cost of Rs. 62.50 crore within four years. A sum of Rs. 4 Crore is set aside for minor components, and the total cost estimated for the project is Rs. 66.5 crore. The BI maintains separate accounts of the funds that are received and the funds used for expenses of various activities. Moreover, an audited Statement of Accounts or a statement certified by the Chief Financial Officer of the Host Institution would be obtained.

Implementation of the Scheme

The selection committee comprises of

  1. Representatives from DST/DSIR
  2. CEO, SVCL (SIDBI Venture Capital Limited)
  3. CMD, NSIC
  4. Economic Adviser, MoMSME
  5. FA of MoMSME
  6. Representatives from DIPP

The request for proposals is from the institutes/implementing agencies would be invited by the Selection Committee by advertising in websites and newspapers, letters to implementing agencies etc., to select the host institutes to set up BIs.

The Selection Committee comprises of sub-committees for specific product groups to examine the feasibility of ideas and proof of concepts, the option of the entrepreneur for host institute, access to workshop and laboratory etc. and produces the procedure to release the fund directly to the host institutions. A sub-committee managed by Industrial Adviser of Development Commissioner (MSME) comprises of

  1. Director of Apex Scientific/Industrial Research Institute in the concerned field or representative.
  2. Incubation Executive nominated by the Director, MSME-DI in the area of Incubation Center.
  3. A representative of Lead Bank in the area of Incubation Centre.
  4. A representative of Host Institute.

Mode of Financial Releases

According to the agreement between the Government, the Host Institution and the entrepreneur, the Government releases the fund to the Host Institution. At first, the Host Institution would be released 30 per cent of the expenditure that is expected to be obtained by establishing and operating incubators during the ensuing financial year. The balance is released to the Host Institution in one or more instalment when the previous amount is utilised by the Host Institution.

Monitoring and Evaluation

The project is monitored and guided by the Ministry of MSME. A monitoring and advisory committee that is headed by Additional Secretary and Development Commissioner comprises of

  1. Representatives of National Manufacturing Competitiveness Council (NMCC)
  2. Representatives of Technology Information Forecasting and Assessment Council (TIFAC)
  3. Representatives of the Lead Bank of the State where the incubator is established
  4. Representatives of Industries Associations represented on the Advisory Committee constituted under the MSMED Act, 2006.

The above-mentioned representatives are constituted to periodically review and guide the implementation of the programme. To make the programme even more effective, mid-term corrections arrived at by the committee are applied.