FY21 MSME cluster projects completed remain lower than projects approved for third straight year

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April 26, 2021 4:30 PM

Ease of Doing Business for MSMEs: The MSE-CDP of the MSME Ministry was launched to support the sustainability and growth of MSEs by addressing common issues such as improvement of technology, skills, quality, market access, etc.

NBFCs, restructering MSMEs, RBI Governor Shaktikanta Das, restructuring scheme of MSME , FIDCIndia has a base of around 6.33 crore MSMEs out of which 6.30 crore (over 99 per cent) are micro-enterprises, according to the MSME Ministry’s annual report 2020-21. (Representative Image)

Ease of Doing Business for MSMEs: The annual number of cluster projects, which includes common facilities centres (CFCs) and infrastructure development (ID) facilities developed, has remained low vis-à-vis the number of projects approved in FY21 for the third straight year under the Micro and Small Enterprise – Cluster Development Programme (MSE-CDP). According to the available data from the MSME Ministry, 68 projects including 26 CFCs and 42 ID facilities were approved under the MSE-CDP out of which 6 CFCs and 12 ID facilities were completed during FY21. Likewise, 22 projects were completed out of 74 approved in FY20 and 28 projects were completed out of 36 approved in FY19. In contrast, 24 projects were completed in FY18 while 21 projects were approved.

Comments from UC Shukla, Director, Cluster Development Programme, Development Commissioner, MSME Ministry were not immediately available for this story.

MSE Cluster Projects (completed)

Source: MSME Ministry Dashboard

The MSE-CDP of the MSME Ministry was launched to support the sustainability and growth of MSEs by addressing common issues such as improvement of technology, skills, quality, market access, etc. The scheme offered grant up to 70 per cent of the cost of the CFC project of a maximum of Rs 20 crore that included cost of land, building, pre-operative expenses, preliminary expenses, machinery and equipment, miscellaneous fixed assets, support infrastructure such as water supply, electricity and margin money for working capital, according to the details on DC MSME portal. Moreover, the grant for infrastructure development is offered up to 60 per cent of the project cost.

Also read: Microfinance, unsecured SME loan pools to face most stress if lockdowns turn more severe: ICRA

How MSMEs have reported benefits from the support provided through CFCs. For instance, units in India’s biggest diamond hub Surat have been able to upgrade their machinery leading to better production. “Around 70 per cent of approximate 7,000 units in Surat’s diamond market are MSMEs. We were able to set up CFCs in the rural areas through the support of the Gem and Jewellery Export Promotion Council. For setting up CFCs, Rs 6 crore investment was provided by the government. The biggest beneficiaries of this have been micro units that didn’t have enough investment to make for expensive machinery. We are seeing a better output while overall production has improved,” Dinesh Navadia, President, Surat Diamond Association told Financial Express Online.

The total projects approved under the programme so far were 479 including 185 CFCs and 295 ID projects out of which 270 have been completed while work is in progress for 209 projects. MSME Minister Nitin Gadkari in February this year had launched 50 artisan-based clusters under the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) in over 18 States to support over 42,000 artisans in the traditional segments such as khadi, coir, handicraft, handlooms, leather, pottery, etc. The government had funded around Rs 85 crore for the development of these 50 clusters, the ministry had said in a statement.

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