Revised Guidelines of Micro and Small Enterprises-Cluster Development Programme (MSE-CDP)

May 31, 2022

The central government has given its approval for the revised guidelines of its key scheme named Micro and Small Enterprises-Cluster Development Programme (MSE-CDP). This is to be implemented during the 15th Finance Commission cycle, i.e. FY22 to FY26. Various departments like Special Purpose Vehicle, MSME-Development Institute, and state governments had suggested simplifying the guidelines of the scheme to reduce the approval time and various processes of the projects.

What is the aim of the scheme?

The aim of the scheme is to enhance the productivity and competitiveness of micro and small enterprises in the nation by undertaking certain interventions. The interventions include infrastructure development and the setting up of common facility centres (CFCs). The Cluster Development Programme is one of the oldest schemes under the Office of the Development Commissioner that is under the Ministry of Micro, Small and Medium Enterprises.

What has the government announced regarding Common Facility Centers?

The grant provided by the central government will be restricted to 70 per cent for the projects costing Rs. 5.00 crore to Rs. 10.00 crore and 60 per cent for the projects costing Rs. 10.00 crore to Rs. 30.00 crore. In the case of North East and the Hill States, Aspirational Districts, and Island territories, the government grant provided will be 80 per cent of the total project cost for the projects costing Rs. 5.00 crore to Rs. 10.00 crore and 70 per cent of the project cost for the projects costing Rs. 10.00 crore to Rs. 30.00 crore. The CFC projects that cost more than Rs. 30.00 crore will be considered for Government assistance after calculating the maximum eligible project cost of Rs.30.00 crore.

What does the government announce regarding Infrastructure Development?

The grant provided by the central government will be restricted to 60 per cent for the project costing from Rs. 5.00 crore to Rs. 15.00 crore for setting up of new Factory Complex and Industrial Estates and the government grant will be 50% for the projects costing Rs. 5.00 crore to Rs. 10.00 crore for the purpose of upgrading the existing Flatted Factory Complex and Industrial Estates. In the case of North East and the Hill States, Aspirational Districts, and Island territories, the grant provided by the government will be 70 per cent of projects costing Rs. 5.00 crore to Rs. 15.00 crore for setting up of new Flatted Factory Complex and Industrial Estates and 60 per cent of the project cost for projects costing Rs. 5.00 crore to Rs. 10.00 crore for upgrading existing Flatted Factory Complex and Industrial Estates. The projects costing over Rs. 10.00 crore or Rs 15.00 crore can also be considered for government grants after calculating the maximum eligible project cost of Rs. 10.00 crore or Rs 15.00 crore.

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