MSE CDP: Projects completed under cluster development programme for MSEs in FY21 lowest in 4 years

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July 26, 2021 4:02 PM

Ease of Doing Business for MSMEs: According to the government data, the total projects completed in FY21 declined to 20 from 22 in FY20, 28 in FY19, and 24 in FY18. In FY22 so far, only two projects were completed.

SIDBI has so far setup Project Management Units (PMUs) in 11 states namely, Assam, Andhra Pradesh, Rajasthan, Gujrat, Haryana, Maharashtra, Delhi, Uttar Pradesh, Uttarakhand, and Tamil Nadu (Representattional image)

Ease of Doing Business for MSMEs: The MSME Ministry’s Cluster Development Programme (CDP), which focuses on enhancing capacity building for micro and small enterprises (MSEs) through setting up of projects including Common Facility Centers (CFC) and Infrastructure Development (ID) centers, has recorded the lowest number of annual projects completed in the financial year 2020-21 since FY18. According to the government data, the total projects completed in FY21 declined to 20 from 22 in FY20, 28 in FY19, and 24 in FY18. In FY22 so far, only two projects were completed. 

“The government has been doing a lot for cluster development in the country but the progress is not very high and hence, more focus is required on district-based approach. It should be one district-one product kind of approach. Maybe we can choose two products for every district. The focus has to be much bigger than what we see in China and smaller countries like Bangladesh which have given huge impetus to the cluster approach. The decline last year could be because of Covid as well,” said DK Aggarwal, Immediate Past President, PHD Chamber of Commerce and Industry and MD, SMC Investment and Advisors told Financial Express Online. 

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

The data on CDP was shared by the MSME Minister Narayan Rane in the Lok Sabha recently. It also showed the gradual decline in the number of CFCs, which focuses on developing common production or processing centre for balancing, correcting, improving production line that cannot be undertaken by individual units, apart from design centres, testing facilities, training centre, etc., from 13 and 17 in FY18 and FY19 respectively to 11 in FY20 and eight in FY21.

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On the other hand, the number of ID centers, which consist of projects for infrastructural facilities like power distribution network, water, telecommunication, drainage, and pollution control facilities, roads, banks, raw materials storage, and more, the set-up has been 11 every year since FY18 till FY20. In FY21, the number only marginally increased to 12. Overall, the total projects completed in four years was 96 including 50 CFCs and 46 ID centers. 

“MSMEs are yet to benefit significantly from the government’s policies. If your focus is very high, there has to be a quantum jump in projects which is not there. Among the high focus areas, I think are textiles and sports good that have tremendous potential,” added Aggarwal. MSE-CDP scheme offers grant up to 70 per cent of the cost of the CFC project of a maximum of Rs 20 crore that included the 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.

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