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

The Micro and Small Enterprises – Cluster Development Programme (MSE-CDP) is a flagship scheme of the Ministry of Micro, Small & Medium Enterprises (MSME), Government of India, aimed at enhancing the productivity, competitiveness, and sustainability of MSEs through the cluster-based approach. The scheme supports both Common Facility Centres (CFCs) and Infrastructure Development (ID) projects, thereby addressing common challenges faced by MSEs such as lack of technology, inadequate testing facilities, skill gaps, and absence of market linkages.

Common Facility Centres (CFCs)

CFCs are the cornerstone of MSE-CDP, designed to create shared infrastructure for a group of enterprises operating within a cluster. These facilities provide access to machinery, testing labs, quality certification, design support, training, research & development, and other common services which would otherwise be unviable for individual micro and small enterprises to establish on their own.

a) Funding Patterns of CFCs under MSE-CDP

Sn Components Total Project Cost Funding Pattern
Govt of India share State Govt share SPV Share
1 Common Facility Centre Rs 5 crore to Rs 10 crore 70% 20% 10%
2 Common Facility Centre Rs 10 crore to Rs 30 crore 60% 20% 20%

b) The funding pattern of projects located in the Aspirational Districts, NER, Hill States, islands territories, LWE affected districts and clusters with more than 50% (a) micro /villages or (b) women owned or (c) SC/ST owned units would be as follows

Sn Components Total Project Cost Funding Pattern
Govt of India share State Govt share SPV Share
1 Common Facility Centre Rs 5 crore to Rs 10 crore 80% 15% 5%
2 Common Facility Centre Rs 10 crore to Rs 30 crore 70% 15% 15%

Admissible items under Setting up of Common Facility Centres (CFCs)
  1. Common Production / Processing Centre (for balancing/correcting / improving production line that cannot be undertaken by individual units).
  2. Common Recycling/Resource Recovery Plant.
  3. Industry 4.0 and its Learning Facilities, Additive Manufacturing Facilities, Digital Infrastructure.
  4. Design/Incubation Centres.
  5. Testing and Quality upgradation Facilities/Product Standards Development.
  6. Packaging Facilities.
  7. Training Centre / Skill Upgradation Facilities.
  8. R&D Centres.
  9. Effluent Treatment Plant.
  10. For waste management, disposal and sustainable handling of biodegradable wastes in industrial areas, biogas / Bio-CNG projects will also be supported.
  11. Common Logistics Centre.
  12. Common Raw Material Bank.
  13. Plug & Play Facility.
  14. Common Renewable Energy Generation (Solar, Wind, Bio) and Energy Management equipments.
  15. Safety and Disaster Risk Reduction equipments.
  16. Facilities relating to linkages Backward / Forward linkages for value addition in bi-product / waste of cluster units.
  17. Any common facilities which will improved competitiveness and productivity of the cluster units.
  18. Export Promotion Facilities for FPO such as for processing, storage (cold chains), Pack Houses, testing and packaging.
  19. Common Facilities for services sector such as automobile, tourism, hospitality, health & medical, farm, Dry cleaner, Testing Laboratories, repair and maintenance or any sector prioritize by Government of India / State Government.
  20. CFC for Greenfield clusters for holistic developments of MSME sector.

Note: Items may be added or deleted with the recommendation of NPAC and approval of Secretary MSME/Minister MSME.

How to Apply for a Common Facility Centre (CFC) under MSE-CDP

a) Cluster Identification
  • A group of Micro and Small Enterprises (MSEs) operating in a similar sector or value chain must be identified.
  • The cluster should demonstrate common requirements for technology, testing, training, or infrastructure.
b) Formation of Special Purpose Vehicle (SPV)
  • The enterprises must form a registered legal entity (SPV).
  • The SPV will be responsible for planning, implementation, and management of the CFC.
c) Preparation of Detailed Project Report (DPR)
  • The SPV, with support from Technical Consultants and the State Nodal Agency (SNA), prepares a DPR.
  • The DPR should include cluster profile, justification, technology needs, cost estimates, business model, implementation plan, and financial details.
d) Submission to District Industries Centre (DIC)
  • The SPV submits the DPR and application through the District Industries Centre (DIC).
  • The DIC examines and forwards it to the State Government/State Nodal Agency (SNA).
e) Appraisal by SIDBI (Technical Agency)
  • SIDBI undertakes techno-economic appraisal of the project, checking feasibility, financial viability, and compliance with guidelines.
f) Scrutiny by State Level Steering Committee (SLSC)
  • The proposal is placed before the SLSC for recommendation.
  • Once approved, it is forwarded to the Development Commissioner (MSME), Ministry of MSME.
g) Examination by National Project Appraisal Committee (NPAC)
  • Based on SIDBI’s appraisal and recommendation of SLSC, the proposal is considered by the NPAC.
  • The NPAC may approve, defer, or seek clarifications.
h) Final Approval by NPAC, Ministry of MSME
  • The NPAC accords final approval to the project.
  • Post-approval, the GoI grant is released in instalments, linked to physical progress as mentioned in the DPR.
i) Implementation
  • The SPV undertakes civil works, machinery procurement, installation, and commissioning as per DPR.
  • Progress is monitored jointly by the State Government, MSME-DI.
j) Operationalisation
  • After completion of civil and machinery works, and upon submission of Utilization Certificates (UCs), the CFC becomes functional for member enterprises.
MSE-CDP Guidelines