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Home > Services > Government Subsidy Loan For MSMEs > Micro & Small Enterprises – Cluster Development Programme (MSE-CDP)


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

Recognising the importance of small and micro-enterprises contributing to the employment generation and economic growth of the country, the Indian government has launched the Micro & Small Enterprises – Cluster Development Programme (MSE-CDP). This initiative is designed to empower and support micro and small enterprises (MSEs) by addressing common challenges they face and providing them with the necessary tools for growth and sustainability.


Key Objectives of Micro & Small Enterprises – Cluster Development Programme

The Cluster Development Programme has several key objectives aimed at enhancing the competitiveness and sustainability of MSEs:

  • Addressing Common Issues: One of the primary goals is to address the common issues faced by MSEs. These challenges include the improvement of technology, skills, and product quality, as well as access to markets and capital. By tackling these issues collectively, MSEs can become more competitive and resilient.
  • Building Capacity: The program aims to build the capacity of MSEs by encouraging the formation of self-help groups, consortia and the upgradation of associations. Collaborative efforts can lead to shared resources, knowledge sharing, and stronger bargaining power in the marketplace.
  • Infrastructure Development: To create a conducive environment for MSEs, the program focuses on the creation and upgrading of infrastructure in both new and existing industrial areas and clusters. This includes the establishment of Flatted Factory Complexes to provide affordable workspace.
  • Common Facility Centers: Common Facility Centers (CFCs) play a vital role in supporting MSEs. These centres provide various services, including testing facilities, training centres, raw material depots, and effluent treatment plants. They complement production processes and reduce the burden on individual MSEs.


Projects Eligible Under MSE-CDP

Projects that were previously sanctioned under the erstwhile Small Industries Cluster Development Programme (SICDP), which has since been renamed MSE-CDP, and Integrated Infrastructural Development (IID) schemes are eligible for financial support under the MSE-CDP as per earlier approvals.


Subsidy and Financial Assistance Under Cluster Development Program

The MSE-CDP offers financial assistance for various interventions as follows:

  1. Preparation of Diagnostic Study Report: The program provides a grant of up to Rs 2.50 lakh from the Government of India (GoI) for the preparation of a Diagnostic Study Report. For field organizations under the Ministry of MSME, this grant is capped at Rs 1.00 lakh.
  2. Soft Interventions: Soft interventions, such as capacity building and training, receive a GoI grant of 75% of the sanctioned amount, with a maximum project cost of Rs 25 lakh per cluster. In the case of clusters in Northeastern and Hill States or clusters with a majority of micro/village, women-owned, or SC/ST units, the GoI grant is increased to 90%.
  3. Detailed Project Report (DPR): For the preparation of a technical feasibility and viability project report, the program offers a GoI grant of up to Rs 5.00 lakh.
  4. Hard Interventions: Tangible assets like Common Facility Centers, equipped with machinery and equipment for critical processes, research and development, and testing, can receive a GoI grant of up to 70% of the project cost, with a maximum limit of Rs 15 crore. For clusters in Northeastern and Hill States or clusters with a majority of micro/village, women-owned, or SC/ST units, the GoI grant is enhanced to 90%.
  5. Infrastructure Development: Infrastructure development projects can receive a GoI grant of up to 60% of the project cost, with a maximum limit of Rs 10 crore (excluding the cost of land). In the case of projects in Northeastern and Hill States or industrial areas/estates with a majority of micro, women-owned, or SC/ST units, the GoI grant is further increased to 80%.

The MSE Cluster Development Program is a transformative initiative that aims to empower and strengthen micro and small enterprises in India. By addressing their common challenges, enhancing their capacity, and providing financial support, this program plays a crucial role in fostering the growth and sustainability of MSEs, ultimately contributing to the country’s economic development.

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