Policies and

Schemes of
Govt of India for
the MSME
Sector
D. Chandra Sekhar
Director ,Govt of India
MSME-DI, Hyderabad
 The MSME sector in India

• Micro, Small and Medium Enterprises are defined in terms of

investment in Plant and Machinery.

•Investment ceilings as per MSMED Act, 2006:

Manufacturing Service (investmt in eqpmt)

Micro upto 25 lakhs upto Rs 10 lakhs

Small 25 lakhs – 5 crores 10 lakhs – 2 crores
Medium 5 crores – 10 crores 2- 5 crores
 Performance and contribution of MSME sector
•MSEs constitute more than 90% of industrial units.

•There are 26.1 million Micro & Small Enterprises

( MSEs) in the country, as per the Quick results of 2006-07 Census
of MSEs

•Only a very small percentage of these ( 10%) are in registered

sector

•This sector provides employment to 59.7m persons- largest

employment provider after agriculture

•Production in MSE sector is over Rs.69512m ( 2008 projections)

•Share in GDP is 5.94%. It contributes to 45% of industrial output.

•Growth rate of this sector (13% - 2008) is significantly higher than

industrial growth rate

•Share in total exports from the country is 40%

 Ministry of MSME
 Ministry of MSME : • Office of DC(MSME)  • KVIC •
NSIC • COIR Board • NI-MSME, Hyderabad • NIESBUD, Noida •
IIE, Guwahati 
MSME-DI in the promotion of MSME sector in AP
MSMEDI offers various services like technical
consultancy in areas of Chemical, Mechanical,
Electrical & Electronics, Ceramics, Glass,
Leather, Footwear, Metallurgy industry. The
major activities of the Institute are:

•Technical guidance for existing and prospective

entrepreneurs
•Preparation of Project profiles on various products.
•Organizing Seminars and Workshops in areas like IPR, WTO implications,
Energy conservation, Problems and prospects of specific industries, etc
•Preparation of District Industrial Potentiality Survey
Reports
•Training: Conducting Industrial Motivation Campaigns, Entrepreneurship
Development Programmes, Skill Development Programmes and
Management Development Programmes etc.
•Export promotion services ( training on packaging for exports, facilitating
MSEs to participate in International Trade Fairs etc)
•Implementation of MSME and NMCP Schemes of GoI, Ministry of MSME
Govt of India schemes
for MSMEs
MSME Schemes
&

NMCP Schemes
 MSME Schemes
 CGTMSE
 CLCSS
 ISO 9000/14000/HACCP Reimbursement
 MDA -International Trade Fairs
 National Awards
 MSE-CDP : Cluster Development
programme
 CGTMSE
 Provides collateral free loans to MSEs.
 Any collateral / third party guarantee free credit facility
extended by eligible institutions, to new as well as existing
MSE with a maximum credit cap of Rs.100 lakh is eligible
to be covered.
 The guarantee cover available under the scheme is to the
extent of 75% / 80% of the sanctioned amount of the credit
facility, with a maximum guarantee cap of Rs.62.50 lakh /
Rs. 65 lakh. The extent of guarantee cover is 85%
for micro enterprises for credit up to Rs.5 lakh. The extent
of guarantee cover is 80% for Micro and Small
Enterprises operated and/or owned by women;
 The fee payable to the Trust under the scheme is one-
time guarantee fee of 1.5% and annual service fee of
0.75% on the credit facilities sanctioned
 Creditlinked Capital subsidy scheme
for Technology upgradation: (CLCSS)
 Technology Upgradation of Micro and Small Enterprises by
providing 15% capital subsidy
( subject to a max of Rs.15 lakhs) on institutional
finance for
 Existing MSEs who upgrade their existing Plant and
Machinery with state-of-the-art technology, with or without
expansion, and new units ,
 Maximum limit of eligible loan for calculation of subsidy
under the revised scheme is Rs. 100 lakh w.e.f. 29-
09.2005.  
 SIDBI , NABARD and Nine other scheduled commercial
banks are nodal agencies for implementation of the
Scheme.
 REIMBURSEMENT SCHEME FOR
ISO 9000/14000/HACCP
CERTIFICATION
 This scheme provides incentive to those
Micro/small scale undertakings that have
acquired ISO 9000/ISO 14001 /HACCP
certifications.
 The Scheme envisages reimbursement of
charges of acquiring ISO-9000/ISO-14001/
certifications to the extent of 75% of the
expenditure subject to a maximum of
Rs. 75,000/- in each case.
 MARKET DEVELOPMENT ASSISTANCE SCHEME :
INTERNATIONAL TRADE FAIRS:

 Registered MSEs are facilitated to participate in select

International Trade Fairs all over the world through subsidy
in space rent and airfare.
 MSEs are nominated to participate in selected International
Trade Fairs at 50% subsidy on space rent and 75%
subsidy on air fare (for one representative per unit).
 The subsidy for Women/SC/ST entrepreneurs is 100% on
space rent and air fare. The total subsidy amount ( on
space rent + air fare, in all cases ) is limited to Rs. 1.25
lakhs.
 Any MSE can participate in One Fair in a given Financial
Year
 MSE-CLUSTER DEVELOPMENT
PROGRAMME: (MSE-CDP ) (for
identified clusters of MSEs)
MSE-CDP aims to support the sustainability and growth of MSEs by addressing
common issues like technology improvement, skills, market access, etc in
identified industrial clusters . Main components of the Scheme are:

 Soft interventions: Include technical assistance, capacity building, exposure

visits, market development, trust building, etc for the cluster units: GoI grant for
soft interventions would be 75% of sanctioned amount of project cost. Max limit
for project cost is Rs. 25 lakh per cluster.

 Hard Interventions – setting up Common Facility Centres, Design Centres,

Testing Facility, Training and R&D Centres, Raw material banks, etc. GoI grant
will be 70% of cost of project of max Rs. 15.00 crores . GoI grant will be 90% for
clusters with more than 50% Micro/village/ women owned/ SC/ST/ units.

 Infrastructure Development – Includes provision of land, water supply,

drainage, power , construction of roads, First Aid Centre, Canteen, or other
need based infrastructure facilities for MSEs in new/existing industrial
estates/areas. GoI grant is restricted to 60% of project cost of Rs10 crores
 NMCP schemes
 National Manufacturing Competitiveness Council has
conceptualized a programme for enhancing the competitiveness of
the Indian Manufacturing Sector, in the wake of increasing global
competition .

 This programme, called National Manufacturing Competitiveness

Programme (NMCP) has ten components.

 The programme was initiated in 2007-08, & has a budget of Rs. 600
crores in 11th Plan

 They include programmes for technology & quality up gradation,

Energy conservation, Business incubation, promotion of lean
manufacture, IPR, Marketing Assistance, promotion of ICT in
MSMEs etc.
 NMCP Schemes
 Direct intervention Schemes :
 Bar Coding fee reimbursement
 Business Incubators
 Lean Manufacture
 Design Clinic
 IPR
 Technology & Quality Upgradation
 Marketing assistance & Technology
upgradation
 Bar Code fee reimbursement
OBJECTIVE: The basic objective of financial assistance is to enhance
the Marketing competitiveness of Micro & Small Enterprises
(MSEs) by way of:
(i) Providing 75% of one time registration fee and annual recurring
fee (for first three years) paid by MSEs to GS1 India.
(ii) Popularising the adoption of bar codes on large scale amongst
MSEs,and
(iii) Motivating and encouraging MSEs for use of bar codes through
conducting seminars on Bar Code, etc.
2. TARGET GROUP: Micro & Small Enterprises (MSEs)
3. ELIGIBILITY: Those MSEs who have Entrepreneurial
Memorandum Part-II acknowledgement number from Directorate
of Industries/ District Industries Centers and also have
registration with GS1 India for use of Bar Codes.
 Support for Entrepreneurial &
Managerial Development through
Business Incubators (BI)
 The main objective of the scheme is to promote
emerging technological and knowledge-based innovative
ventures that seek the nurturing of ideas from
professionals beyond the traditional activities of Micro,
Small & Medium Enterprises.
 Each BI is expected to help the incubation of about 10
new ideas or units.
 For this service, which includes the provision of
laboratory/workshop facilities and other
assistance/guidance to young innovators, each BI will be
given between Rs.4 lakh and Rs.8 lakh per idea/unit
nurtured by them, limited to a total of Rs.62.5 lakh for
the ten ideas.
 Lean Manufacture:
 MSMEs will be assisted in reducing their manufacturing
costs, through proper personnel management, better
space utilization, scientific inventory management,
improved processed flows, reduced engineering time
etc.
 Lean Manufacturing involves applying Lean Techniques
(e.g. Total Productive Maintenance (TPM), 5S, Visual
control, Standard Operation Procedures, Just in Time,
Kanban System, Cellular Layout, Poka Yoke, TPM, etc.)
to identify and eliminate waste and streamline a system
 GoI funding is 80% of consultant fee
 Design Clinic
 Objective:
To assist local enterprises for engaging external
design expertise fo new designs, and/or design-
related products and services & to effectively
develop the capabilities of the local enterprises.
 Financial Assistance :
The Design Clinic program shall support initial design work by
reimbursing 60% of the designer fee up to a maximum limit of
Rs. 9.00 Lakhs (Rs. Nine Lakh only) in case of a group up to
three MSME applicants & 15 Lakhs (Rs. Fifteen Lakhs only) in
case of a group of four or more MSME applicants.

Funding assistance up to Rs. 2 Lakhs (Rs 1.5 lakh as GoI) shall

be available for final year student projects done for the MSMEs.
Intellectual Property Rights :
 MSEs are eligible for grant of Rs. 0.25 lakhs for a
domestic patent, Rs. 2.00 lakhs for a Foreign
Patent and Rs. 1.00 lakh for GI registration .

 Grants of Rs. 2.5 lakhs for Pilot studies in the area

of IPR, Rs. 2 lakhs for interactive seminars, Rs.
1.00 lakh for Awareness programmes.
 Interaction with foreign agencies for IPR is provided –
for domestic intervention Rs 5.00 lakhs, for
international exchange programme , upto a
maximum of Rs. 7.5 lakhs.
19
 Technology & Quality up gradation :
( for Energy Efficiency and product quality certification)

 Subsidy to MSMEs acquiring International/

National Product Certification
National standards ( BIS,BEE etc) max Rs 1.5 lakh for
International standard (CE, UL, ANSI etc) max 2.00 lakhs

 25% subsidy for Implementation of energy

efficient technologies (EET) by MSMEs, subject to a
ceiling of Rs. 10.00 lakhs

 75% ( max of 15 lakhs) of cost for setting up

Carbon Credit Aggregation Centres (CCA) in
MSME clusters.
 Marketing Assistance And Technology
Upgradation

 Reimbursement to ISO 18000/ISO 22000/ISO 27000

certification: One time reimbursement of expenditure to the
extent of 75% of expenditure subject to a maximum of Rs
1.0lakh per unit who acquire ISO 18000/22000/27000
Certification
 Competition Studies: Detailed studies on threatened product
groups/clusters : max Rs 8 lakhs per cluster
 New markets through State/District level local
Exhibitions/Trade fairs.50% space subsidy, to & fro A/c (II)
Fair –limited to Rs. 20,000 per unit, ( 30,000 for
women/SC/ST) .
 Corporate Governance Practices: reimbursement upto 50%
of the total expenditure subject to Rs.45000/- per MSME unit
for corporate governance or Limited Liability Partnership(LLP)
framework.
 For further details, you may access us at :

MSME-DI, MINISTRY OF MSME,

GOVT OF INDIA, HYDERABAD
www.dcmsme.gov.in
http://msmehyd.ap.nic.in
Ph: 040-23078131-33,
040-23073926 (D)
Telefax: 23078857

Branch:
MSME-DI, F19-22, Autonagar, Visakhapatnam
Ph: 0891-2517942, email : brsisivm@dataone.in