What are MSMEs?
The Government of India has introduced MSME or Micro, Small, and Medium Enterprises in agreement with the Micro, Small, and Medium Enterprises Development (MSMED) Act of 2006.
MSMEs were redefined on 13th May 2020 as :
(i) a micro enterprise, where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;
(ii) a small enterprise, where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees;
(iii) a medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.
Prime Minister Employment Generation Programme and Other Credit Support Schemes
1. Prime Minister Employment Generation Programme (PMEGP)
This scheme is focused on employment generation and loans provided under this scheme are for Greenfield Projects.
The maximum cost of the project under this scheme for :
Manufacturing Sector – INR 25 Lakhs
Service Sector – INR 10 Lakhs
Subsidy Provided :
General Category – Urban Area – 15%
Rural Area – 25%
Special Category (including SC/ ST/ OBC/ Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas, etc.)
Urban Area – 25%
Rural Area – 35%
The balance amount of the total project cost will be provided by the banks in the form of term loans and working capital.
2. Credit Guarantee Trust Fund For Micro and Small Enterprises (CGT SME)
Under this scheme, a collateral-free loan is provided to both existing and new enterprises up to a limit of INR 100 lakh, on payment of a guarantee fee to the bank by MSE.
Note: This scheme is limited to Micro and Small Enterprises.
Who can apply: Existing and New Enterprises.
How to apply: http://www.dcmsme.gov.in/schemes/sccrguarn.htm
3. Interest Subsidy Eligibility Certificate (ISEC)
This scheme is an important mechanism for funding the Khadi program undertaken by Hadi institutions. This scheme focuses on mobilizing funds from banking institutions for filling the gap between the actual fund requirement and the availability of funds from budgetary sources.
This scheme provides a 4% concessional rate of interest per year for working capital. Who can apply: Khadi Institutions with valid Khadi Certification.
How to apply: The Khadi institutions will apply to the financing bank for working capital along with the ISEC certificate issued by KVIC.
Technology Upgradation and Quality Certification
1. Financial Support to MSMEs in ZED Certification Scheme
The motive of this scheme is to inculcate Zero Defect & Zero Effect practices in manufacturing processes. Motivating the MSMEs for assessment of their enterprise for ZED Certification, so that they can increase productivity, expand their market as IOPs, become vendors to CPSUs, have more IPRs, develop new products and processes, etc.
The subsidy provided here would be :
Micro Enterprises – 80%
Small Enterprises – 60%
Medium Enterprises – 50%
Who can apply: All Manufacturing MSMEs have Udyog Adhar Memorandum.
How to apply: http://www.zed.org.in/
2. Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
This Scheme provides a 15% Subsidy for additional investments up to 1 crore for technology upgradation by MSEs.
Who can apply: Any MSE unit
3. Marketing Support/Assistance to MSMEs ( Bar Code )
Under this scheme, the Ministry conducts seminars and reimburses registration fees for barcoding to encourage MSEs to use bar codes. Financial assistance for reimbursement of 75% of the one-time registration fee (Under MSE-MDA) and 75% of the annual recurring fee for the first three years (Under NMCP) paid by MSEs to GS1 India for the use of barcoding.
Who can apply: MSEs with GS1 India Registration for use of barcode.
How to apply: http://www.dcmsme.gov.in/
4. Lean Manufacturing Competitiveness for MSMEs
Financial assistance is provided for the implementation of lean manufacturing techniques, primarily the cost of lean manufacturing consultant – 80% by GOI and 20% by Beneficiary.
Who can apply: The scheme is open to all manufacturing MSEs. The units are required to form MC, ideally of 10 units each with a minimum of 6, by signing among themselves a Memorandum of Understanding and MoU to participate in the scheme.
How to apply: http://www.dcmsme.gov.in/schemes/lean-manufact.htm
5. Design Clinic for Design Expertise to MSMEs
This scheme provides Funding support of :
₹60,000 per seminar and 75% subject to a maximum of ₹3.75 lakhs per workshop
To facilitate MSMEs to develop new Design strategies and or design-related products and services through project interventions and consultancy.
Government of India contribution @ 75% for micro, 60% for SMEs for the project range ₹15 lakhs to ₹40 lakhs.
Who can apply: Expert Agencies, MSMEs, Academic Institutions along with designated MSMEs.
How to apply: http://www.dcmsme.gov.in/schemes/DesignClinic.htm
6. Entrepreneurial and Managerial Development of SMEs through Incubators
This scheme provides early-stage funding to innovative business ideas for setting up business incubators.
Funding for BI: The cost of each Incubator varies from 4 to 8 lakhs, the overall limit for each BI is 62.5 Lakh, Upgradation of Infrastructure – is 2.5 Lakh, Orientation/training – is 1.28 lakh, Administrative expenses – is 0.22 lakh
Total assistance per BI – 66.50 Lakh.
Who can apply: Any MSME with innovative ideas.
How to apply: http://www.dcmsme.gov.in/schemes/supportforemdti.html
7. Enabling Manufacturing Sector to be Competitive through QMS QTT
The scheme focuses on MSMEs adopting the latest Quality Management Standards and Quality Technology Tools.
Funding support up to Rs 79,000/- per program for conducting QMS/QTT awareness campaigns for MSEs through expert organizations.
Funding support up to Rs 2.5 lakh per unit for implementation of QMS and QTT in selected MSMEs through expert organizations.
Funding support for conducting a C-watch study for products having a threat from foreign goods.
How to apply: www.dcmsme.gov.in/schemes/QmsQtt.htm
8. Building Awareness of Intellectual Property Rights
The purpose of the scheme is to enhance awareness among the MSMEs about Intellectual Property Rights and to take measures for protecting their ideas and business strategies. The government would provide the following assistance :
Conducting Awareness programs on IPR – 1 lakh per program
Conducting pilot studies for selected clusters/groups of industries – 2.5 lacks per study.
Funding support for conducting interactive seminars/workshops, and specialized training on IPR.
How to apply: www.dcmsme.gov.in/schemes/IPRDetail.html
Marketing Promotion Schemes
1. International Cooperation Scheme
This scheme provides MSMEs an opportunity to :
Visit international exhibitions, and conferences – for exploring new areas of technology infusion/upgradation, joint ventures, improving the market of MSMEs products, etc.
Holding international conferences/summits/workshops/seminars relating to the MSME sector to be organized in India by the Industry Associations/ Government organizations.
The scheme provides financial assistance on a reimbursement basis for airfare, space rent, freight charges, advertisement & publicity charges, and entry/registration fees on a reimbursement basis in case of participation in international exhibitions/trade fairs.
Who can apply: Government Institutions and Registered Industry Associations associated with the promotion and development of the MSME sector.
2. Marketing Assistance Scheme
This Scheme provides :
Organization of exhibitions abroad and participation in international exhibitions/ trade fairs. Co-sponsoring exhibitions organized by other organizations/industry associations/ agencies, Organising buyer-seller meets intensive campaigns and marketing promotion activities.
Maximum Budgetary support – International exhibitions/trade fairs – 30 Lakhs per event
Maximum Budgetary support – Organising Domestic Exhibitions – 45 Lakhs per event.
Who can apply: MSMEs, Industry Associations and other organizations related to the MSME sector are eligible to apply.
How to apply: Applications/proposals seeking assistance under the scheme should be submitted to the Branch Manager of the nearest office of the National Small Industries Corporation, with full details and justification in support of the application.
Entrepreneurship and Skill Development Programme
1. Entrepreneurship Skill Development Programme ( ESDP )
Entrepreneurship Development Programmes are being organized regularly to nurture the talent of youth, These EDPs are generally conducted in ITIs, Polytechnics, and other technical institutions, where skill is available to motivate them towards self-employment.
20% of total targets of ESDPs – weaker section – 500 stipend per month per candidate.
2. Assistance to Training Institutions (ATI)
The assistance is provided to National level training institutions operating under the Ministry of MSME, namely, NIMSME, KVIC, Coir Board, Tool Rooms, NSIC & MGIRI for strengthening infrastructure and support for entrepreneurship and skill development. The scale of maximum assistance to the State level EDIs will be restricted to Rs.2.5 crore in each case. Assistance for skill development programs will be provided as per the prescribed rates.
Infrastructure Development Programme
MICRO AND SMALL ENTERPRISES CLUSTER DEVELOPMENT ( MSE-CDP)
This Scheme supports financial assistance for the establishment of Common Facility Centres (CFCs) for testing, training centers, R&D, etc. and to upgrade infrastructural facilities in industrial clusters.
Setting up of CFCs – the maximum eligible cost of 15 crore – ( 70% contribution by GOI )
Infrastructural Developments – the maximum eligible cost of 10 crore – ( 60% contribution of GOI )
Who can apply: Clusters, Industrial associations.
How to apply: https://cluster.dcmsme.gov.in