Ease of Doing Business for MSMEs: Small Industries Development Bank of India (SIDBI) on Monday announced initiatives to boost cluster development for the growth of micro, small, and medium enterprises (MSMEs). The bank launched a focused vertical for MSME clusters’ centric programmes along with a Cluster Development Fund to give a thrust to hard infrastructure support to state governments. The bank said it is working on both interventions viz., hard infrastructure (physical infrastructure) and soft infrastructure (training, skilling, marketing, technology access, design, etc.) “to strengthen clusters to evolve as model clusters and also to increase MSMEs’ access to services, thus rising up the value chain.”
“There are two crucial aspects to a cluster – hard and soft infrastructures. We have set up a Cluster Development Fund with the Reserve Bank of India’s support that will attend to the hard infrastructure side of a cluster. We have also launched the Business Development Services Intervention programme in five clusters that will attend to the soft side of it and we think it can impact 20,000-25,000 MSMEs,” Ravindra Kumar Singh, General Manager and Head — Promotion and Development, SIDBI told Financial Express Online.
The five clusters included the tourism cluster in Jammu & Kashmir, Delhi-NCR innovation cluster; Jodhpur wood furniture cluster, Sambalpur textile cluster, and Chennai leather cluster.
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SIDBI has been structuring the fund for the past few months and has now “started channelising it after formulating the scheme. The state governments and others have to avail it now,” added Singh. SIDBI on Monday also launched a book titled Diagnostic Mapping of Cluster- Charting the Path ahead through Intervention that complied the findings of diagnostic studies conducted in 30 clusters. SIDBI said the book contains recommendations and action plans for financial and non-financial issues, interventions suggested at the policy, cluster, and unit level. SIDBI is looking to undertake diagnostics of 100 clusters.
“We will rope in an agency and that will, based on the diagnostics, do action plan formulation that will have a break of short-term and long-term goals. In discussion with clusters stakeholders, it will formulate an action plan for two-three years,” said Singh.
SIDBI said its Cluster Development Strategy currently catered to more than 600 MSME clusters through its offices and supported the entire value chain. “Some of the unique engagements in clusters included EU Switch Asia programme in 18 clusters of nine states, cluster outreach programmes followed by setting up of Project management Unit (PMU) in 11 states with thrust on clusters and state cooperation, State Rural Livelihood Missions (SRLM), and engagement with One District One Product (ODOP) districts of Uttar Pradesh.”