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

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

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

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