• Posted on: 29 January 2016
  • By: admin

The Ministry of Micro, Small and Medium Enterprises (MSME) adopted Cluster Development approach as a key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country. Clustering of units also enables providers of various services to them, including banks and credit agencies, to provide their services more economically, thus reducing costs and improving the availability of services for these enterprises.


Scope of the scheme:

(i) Diagnostic Study

(ii) Soft Intervention

(iii) Setting up of Common Facility Centres (CFCs)

(iv) Infrastucture Development (Upgradation / New)

Cost of Project and Govt of India Assistance:

(i) Diagnostic Study - Maximum cost Rs. 2.50 lakhs.

(ii) Soft interventions - Maximum cost of project Rs. 25.00 lakh, with GoI contribution of 75% (90% for Special Category States and for clusters with more than 50% women/micro/village/SC/ST units).

(iii) Hard interventions i.e setting up of CFCs – maximum eligible project cost of Rs. 15.00 crore with GoI contribution of 70% (90% for Special Category States and for clusters with more than 50% women/micro/village/SC/ST units) .

(iv) Infrastructure Development in the new/ existing industrial estates/areas.Maximum eligible project cost Rs.10.00 crore, with GoI contribution of 60% (80% for Special Category States and for clusters with more than 50% women/micro/SC/ST units).

Exhibition Centres by Associations of Women Entrepreneurs:
The GoI assistance shall also be available to Associations of Women Entrepreneurs for establishing exhibition centres at central places for display and sale of products of women owned micro and small enterprises @ 40% of the project cost. The GoI contribution will be towards furnishings, furniture, fittings, items of permanent display, miscellaneous assets like generators, etc. 

Activity Implementing Agency


Implementing Agency

Diagnostic study

• Offices of the Ministry of MSME

• Offices of State Governments • National and international institutions engaged in development of the MSE sector.

• Any other institution/agency approved by the Ministry of MSME

Soft Interventions

Setting up of CFC

Infrastructure Development projects

State Government through an appropriate state government agency with a good track record in implementing such projects.



Read the Modified Guidelines on Cluster Development


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