MSME-Development Institute, Ranchi

Ministry of MSME, Govt. of India
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National Manufacturing Competitiveness Programme (NMCP)

The Government has announced formulation of National Competitiveness Programme in 2005 with an objective to support the Small and Medium Enterprises (SMEs) in their Endeavour to become competitive and adjust the competitive pressure caused by liberalization and moderation of tariff rates. Para 59 of the Budget Speech 2005 says as follows:-

”Worldwide, it is manufacturing that has driven growth. In order to revive the manufacturing sector, particularly small and medium enterprises, and to enable them to adjust to the competitive pressures caused by liberalization and moderation of tariff rates, I propose to launch a new scheme that will help them strengthen their operations and sharpen their competitiveness. The scheme will be called as “Manufacturing Competitiveness Programme”. The design of the scheme will be worked out by the National Manufacturing Competitiveness Council (NMCC) in consultation with the industry”.

Accordingly, the NMCC along with relevant stakeholders like the Ministry of MSME has conceptualized and finalized the components of the programme incorporating suitable inputs from the stakeholders in a meeting taken by Chairman, NMCC on 7.12.2005. The NMCP, as conceptualized by the NMCC was accepted by the Government and announced for implementation in the Budget 2006-07, para 68 of which states as under:-

“The National Manufacturing Competitiveness Council (NMCC) has finalized a five-year National Manufacturing Competitiveness Programme. Ten schemes have been drawn up including schemes for promotion of ICT, mini tool room, design clinics and marketing support for SMEs. Implementation will be in the PPP model, and financing will be tied up during the course of the next year”. The details of the operational schemes are as given in the following pages:

Support for Entrepreneurial and Managerial Development of MSMEs through Incubator

>> To promote emerging technological and knowledge based innovative ventures that seek the nurturing of ideas from professionals beyond the traditional activities of MSMEs.

>> Grant in Aid to HI for developing and nurturing the ideas up to max. Rs.15.00 lakh per idea.

>> HI/ BI may be given upto Rs. 1 cr. for Plant & Machineries.

>> HI/ BI may be given up to Rs 1 cr. as SEED Capital support for deserving ideas for Startup @ Rs 20 lakh per idea.

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Marketing Assistance and Technology Upgradation (MATU) to MSMEs:

Marketing is key to the success of any enterprise and it is more relevant in regard to Micro, Small and Medium Enterprises (MSMEs). This sector is characterized by absence of strong brand presence in the market and also largely unorganized marketing network unlike large enterprises. Due to resource limitations, the access to foreign market is not commensurate to their potentials. This Office is implementing various schemes, which aim to provide a better competitive edge to the product of MSME sector in the market. Following are the components of the scheme:

Participation of manufacturing MSEs in Domestic Trade Fairs/Exhibitions:

To encourage manufacturing Micro and Small Enterprises (MSEs) in their efforts of tapping and developing domestic markets. Registered MSEs are facilitated to participate in selected Domestic Trade fairs at 80 % Subsidy for general category and 100% for SC/ST/Women/NER/PH for space rent (Maximum upto Rs 20000).Similarly 100% of contingency expenditure (Includes travel, publicity and freight) will be reimbursed for the fair.(Maximum upto Rs 10000)

Participation of manufacturing MSEs in International Trade Fairs/Exhibitions:

To encourage manufacturing Micro and Small Enterprises (MSEs) in their efforts of tapping and developing overseas markets. Registered MSEs are facilitated to participate in selected International Trade fairs at 80 % for general category and 100% for SC/ST/Women/NER/PH for space rent (Maximum upto Rs 100000 for International Trade Fair). Similarly 100% of contingency expenditure (Includes travel, publicity and freight) will be reimbursed for the fair.(Maximum upto 1.25 Lakhs)

International/National Workshops on marketing/ Public Procurement/Packaging etc. for MSMEs:

International/National Workshops/Seminars on Marketing/Packaging will be organized for promotion of new marketing techniques, emerging global marketing/product innovation trends in various product and services verticals, development in packaging, reviewing public procurements with Central Ministries/Departments/Central Public Sector Undertakings (CPSUs) under Public Procurement Policy for MSEs Order 2012 and topics relevant to MSME sector. The quantum of assistance would be as under:

SL No. Item Scale of Assistance
1 National Workshop/Seminar

Rs. 2.5 Lakh per workshop/seminar anywhere in the country (or actual whichever is lower).

2 International  workshop/Seminar

Rs. 2.5 Lakh per workshop/seminar anywhere in workshop/ the country with an additional cost of Rs. 2.5 Lakh Seminar (maximum) towards cost of air travel, boarding & lodging etc. for international experts (or actual whichever is lower) subject to condition that international workshop/seminar should not be held in any five star hotel.

Vendor Development Programme for MSMEs:

A Vendor Development Programme provides a common platform for buyer and sellers including displaying the products and service of MSMEs and requirements of Large Scale buyer organisations. The significance of Vendor Development Programmes has increased manifold in view of the Public Procurement Policy for MSEs Order 2012.

State level Vendor Development Programme

These programmes will primarily focus Vendor-Vendee match making between MSMEs and CPSUs located in the State & other procuring agencies. The discussion on Public Procurement Policy for MSEs Order-2012 will also part of these programmes. The duration of these programmes will be one day. The funds for organizing these programme will be Rs. 30,000/- per programme.

National Level Vendor Development Programme:

These programmes will focus on organizing Industrial Exhibition cum Buyer Seller Meet with an objective of providing opportunity for MSME to display their products and competencies where as Large buyer to display their product/services requirements. The participants will be nationwide. The workshop on Public Procurement Policy for MSEs Order 2012, will be the part of the programme. Seminar/discussion/workshop on various schemes for MSME Sector would also be the part of the programme. The duration of programme will be 2-3 days.

Reimbursement for obtaining Bar Code by MSEs:

Bar codes are the series of black lines and white spaces printed on product packages or attached as tags on consumer products. Information on a product or a consignment like its item code or serial number, expiry date, consignor/consignee etc., can be represented through such bar codes.

When these bar codes are scanned using a scanner, it enables instantaneous data capture with 100% accuracy and at great speeds.

Bar Coding can have a significant impact on the success of any enterprise/ company and organisation.

Timely and accurate capture of product information and its communication electronically across the Supply Chain ahead of physical product flow is critical to lowering inventory costs, in accurate sales forecasting & dynamic production scheduling and in product track and trace.

Bar Coding not only facilitates the exchange of information between buyers and sellers, but also provides the potential for better visibility and sharing of information across an entire Supply Chain. Other benefits are :

  1. (i) Automated data capture with 100% accuracy,
  2. (ii) Real time stock management of raw materials and finished goods
  3. (iii) Fast and error free data recording on product/ consignment movement
  4. (iv) Easy integration with existing software, if any
  5. (v) In compliance with growing requirements of leading national markets
  6. (vi) In line with requirements of international retailers &
  7. (vii) Also gives international look and feel.

GS1 India, an autonomous body under Ministry of Commerce & Industry, Government of India is a solution provider for registration for use of Bar Coding. To become a subscriber of GS1 India, all one has to do is fill up the registration form and make the necessary payments as registration fee. Details about registration with GS1 India for use of Bar Coding are available on their website www.gs1india. org

Subsidy from Govt of India:

Office of Development Commissioner (MSME), Ministry of MSME, provides the financial assistance for reimbursement of 75% of one-time registration fee (Under SSI-MDA Scheme) w.e.f. 1st January, 2002 and 75% of annual recurring fee for first three years (Under NMCP Scheme) w.e.f. 1st June,2007 paid by MSEs to GS1 India for using of Bar Code.

Any other charges like service taxes, etc. are not reimbursable. Eligible MSEs may apply to the Director, Micro, Small & Medium Enterprises

Development Institute, Ranchi in prescribed application form for claiming reimbursement on Bar Code. Application Form along with formats for the supporting documents may be collected from office Website

Credit Linked Capital Subsidy (CLCS) Scheme

The objective of CLCS of the scheme is to facilitate technology up-gradation to MSEs through institutional finance for induction well established and proven technologies in the specific sub-sector/products approved under the scheme.

15% capital subsidy limited to maximum 15lakh (maximum eligible loan Rs.100 lakh) for indentified sectors/ subsectors/ technologies

For SC, ST, Women, LWE/Aspirational District, it is admissible for investment in acquisition/ replacement of P&M/ equipments and technology up gradation of any kind.

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2. Financial Support to MSMEs in ZED Certification ) Scheme

The scheme envisages promotion of Zero Defect and Zero Effect (ZED) manufacturing amongst MSMEs and ZED Assessment for their certification

SL. No. Total Cost
(Component Wise)
1 Online (e-Platform) self assessment Free of Cost
2 Desk Top assessment Rs 10,000/-per MSME
3 Complete assessment A) Rs 80,000/- for ZED rating per MSME
B) Rs 40,000/- for additional ZED Defence rating
C) Rs 40,000/- for Re-rating (Above rating costs will include cost of Rs 10,000/- as certification cost by QCI

Subsidy for Micro, Small & Medium Enterprises as per the scheme will be 80%, 60% and 50% respectively

Levels of ZED rating system for MSMEs – Bronze, Silver, Gold, Diamond, Platinum

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Lean Manufacturing Competitiveness Scheme

The objective of the scheme is to enhance the manufacturing competitiveness of MSMEs through Lean Manufacturing Techniques by:-

(a) Reducing waste
(b) Increasing productivity
(c) Introducing innovative practices for improving overall competitiveness
(d) Inculcating good management systems
(e) Imbibing a culture of continuous improvement

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Design Expertise to Manufacturing MSME Sector

>> The objective of the scheme is to bring Indian manufacturing sector and Design expertise/Design fraternity on to a common platform and to provide expert advice and cost effective solution on real time design problems, resulting in new product development, continuous improvement and value addition for existing products including new products.

>> To promote design as a value adding activity and integrate it into mainstream business and industrial processes to MSMEs

>> GoI Contribution @ 75% for Micro, 60 % for SMEs for project range Rs 15-40 lakh .

>> For student design project, GoI contribution @ 75% for the project cost Rs.2 lakh

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Design Clinics Scheme for design expertise to Micro Small and Medium Enterprises (MSMEs) manufacturing sector

The main objective of the Design Clinic is to bring the MSME sector and design expertise into a common platform, to provide expert advice and solutions on real time design problems, resulting in continuous improvement and value addition for existing products. It also aims at value added cost effective solutions. These Design Clinics in clusters of the country are to usher in a continuous competitive advantage to the MSMEs

Design Clinic is a tested strategic model of design intervention, where a solution to an existing design problem is diagnosed and remedial steps suggested by a multi-disciplinary team of design experts. In this scheme, the value additions to an idea or a concept are imparted through interaction at a lesser cost to a specific industry/sector. It applies to a sector that requires intervention, like manufacturing etc, as the existing conventional models of design consultancy and training are not viable. These models bring design exposure to the door -step of industry clusters for design improvement, evaluation, analysis and adopting even long-term consultancy/design related intervention.

The broad activities planned under the scheme include creation of Design Clinics Centre along with four regional centres for intervention on the design needs of the MSME Sector. Further these centres will have linkages with engineering, management, design institutes of the country. The scheme is under operation in a Public Private Partnership (PPP) Mode. For present status logon to

A Special Purpose Vehicle (SPV) will be formed in each cluster. It is expected that once MSMEs are introduced to the benefits and savings that accrue from LM techniques, they would themselves continue the Scheme from the second year onwards at their own expense. A three tier implementing structure is in place with a group of 10 or so MSMEs (SPV) at the lowest local-tier and a Lean Manufacturing Screening and Steering Committee (SSC) under DC(MSME) at the highest tier The intermediate tier, National Monitoring and Implementing Unit (NMIU) is responsible for facilitating implementation and monitoring of the Scheme. For the Pilot phase of 100 Mini Clusters, it is envisaged that NPC (National Productivity Council) function as NMIU.

A financial support by the Government of India upto a maximum of 80% of the Consultant fees (maximum 36 lakhs for 18 months) for each Mini Cluster will be provided. Remaining 20% is to be borne by the beneficiaries MSME units.

6. Building Awareness on Intellectual Property Rights (IPR) for MSMEs

>> To enhance awareness of MSME about Intellectual Property Rights (IPRs) to take measures for the protecting their ideas and business strategies.

GoI grant for:-
  1. Domestic Patent - Rs. 1 lakh
  2. Foreign Patent - Rs 5 lakh
  3. GI Registration - Rs 2 lakh
  4. Trade Mark – Rs 10000/-

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Digital MSME Scheme for Promotion of Information and Communication Technology (ICT) in MSME Sector

>> The main objective of scheme is to make MSMEs digitally empowered and motivate them to adopt ICT tools and applications in their production & business processes with a view to improve their competitiveness in national and international market.

(a) Awareness Programme and Work Shop
(b) Development of e-Platform
(c) Development of software /Apps for MSMEs
(d) Digital Literacy and e-marketing
(e) Training to MSME officials, MSMEs, Professionals etc
(f) Digital Empowerment through Enterprise Development Centre (EDC)
(g) Assistance for IT infrastructure to various Implementing Agencies (IA) upto Rs.10 lakhs per IA
(h) Futuristic developments
(i) Publicity, Branding and Mobilization
(j) Impact Assessment and Survey including Data Analytics
(k) Miscellaneous Expenses

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Procurement and Marketing Support(PMS)

>> The schemes aims at promoting new market access initiatives, creating awareness among MSMEs about packaging ,import-export policy and procedure, GeM portal, trade fairs, Bar code, digital advertising, E-Marketing, GST, Public Procurement Policy, MSME Conclave, latest development in international/National Trade etc.
(a) Participation of individual MSEs in domestic trade fairs/ exhibitions across the country - GoI contributes 80% of space rent for General category units and 100% for SC/ST/women/NER/PH units limited to Rs. 30,000/- or actual whichever is less.
(b) GoI contributes 100% contingency expenditure for all categories of units subject to maximum RS. 15,000/- or actual. Capacity building of MSMEs in modern packaging technique - GoI contributes 80% of total cost paid to empanelled agency / consultancy organisation for General category units and 100% for SC/ST/Women/NER/PH units limited to Rs.50,000/- or actual whichever is less for packaging consultancy.
(c) Development of Marketing Haats - GoI contributes for up gradation/ renovation/ modification in existing facilities maximum sanction amount will be Rs. 10 lakh per haat / city or actual.

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International Cooperation (IC)

>> Technology infusion and/or up gradation of MSMEs of India , their modernization and promotion of their exports are the principal objectives of assistance under this scheme.

>> Visit of MSME delegations to other countries in international exhibitions/ trade fairs, conferences/ summits/ workshops etc. for exploring new areas of technology infusion/ up gradation, joint ventures, improving market of MSMEs products:
(a) GoI contributes 100% of the economy class airfare subject to a maximum of Rs. 1.00 lakh or actual fare paid, whichever is lower (for one MSME unit).
(b) The minimum number of the MSME units must not be less than 10 in a delegation.

>> Participation of MSME delegations in International exhibitions, trade fairs and buyer-seller meets in foreign countries:
(a) Space Rent (Stall Charges): GoI contributes 100% of the space rent subject to a maximum of Rs. 1.25 lakh or actual rent paid, whichever is lower per unit
(b) Air Fare: GoI contributes 100% of the economy class airfare subject to a maximum of Rs. 1.00 lakh or actual fare paid, whichever is lower per unit
(c) Freight charges: GoI contributes actual subject to maximum of 25,000/- per unit (Rs.37,500/- per unit for Latin American countries).

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Micro and Small Enterprises – Cluster development Programme (MSE-CDP)

>> The objective of the scheme is to provide Plant & Machinery support and other Infrastructural support to overcome common threats and enjoying common opportunity to a group of MSEs(Minimum 20 MSEs)

>>  Common Facility Centers (CFCs):
(a) The GoI grant will be restricted to 70% of the cost of project of maximum Rs 15.00 crore.
(b) GoI grant will be 90% for CFCs in Clusters with more than 50% micro/ village/ women owned/ SC/ST units.

>>  New/ existing Industries Area Infrastructure Development:
(a) The GoI grant will be restricted to 60% of the cost of project of Rs 10.00 crore for Industrial Estate.
(b) The GoI grant will be 80% for projects in industrial areas/ estates with more than 50% micro/ women owned/ SC/ST units.

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  • Every Central Ministry, Department/PSUs shall set a target of Minimum 25% of the total annual purchases of the products or services from MSE Sector.
  • The 4% of total procurement earmarked for MSEs owned by SC/ST entrepreneurs .
  • The 3% sub-target for procurement earmarked for MSEs owned by Women entrepreneurs .
  • Price Preference (L1+ 15%)
  • Reservation of 358 items for exclusive purchase from MSEs
  • Issue of tender sets free of cost
  • Exemption from payment of earnest money deposit (EMD)

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Entrepreneurship and Skill Development Programme (ESOP) Aims and objectives

>> The objective of the programme is to motivate young persons (Men and women) representing different sections of the society including SC/ST/Women, physically handicapped, Ex-servicemen and BPL persons to consider self employment or entrepreneurship as one of the career options. The ultimate objective is to promote new enterprises, capacity building of existing MSMEs and inculcating entrepreneurial culture in the country.

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Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

  • The objective of the scheme is to ensure better flow of Credit to MSEs by minimizing the risk perception of financial institutions and banks in lending without collateral security.
  • Guarantees are provided for extending collateral free lending to MSEs through banks and financial institutions (including NBFCs).
  • Collateral free loan up to a limit of Rs. 2 Cr. for individual MSE on payment of guarantee fee to bank.
  • Provides up to 75% guarantee.

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Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme for Women

Women have been among the most disadvantaged and oppressed sections of our country with regard to access to and control over resources. Problems faced by them and particularly for those who are illiterate and semi-illiterate both in rural and urban areas continue to be grave. In order to alleviate their problems, Govt. of India had launched a scheme titled "Trade Related Entrepreneurship Assistance and Development (TREAD) "during the 9th plan period. The scheme envisaged economic empowerment exclusively of women through trade related training, information and counseling extension activities related to trades, products, services etc. The Scheme has provided for financial loans through NGOs who were also provided GoI grant for capacity building. This Assistance was to be provided for self-employment ventures by women for pursuing any kind of non-farm activity

There is a provision for Government of India Grant up to 30% of the loan/ credit maximum up to Rs. 30.00 lakh as appraised by lending institution/ banks. The lending institutions/ banks would finance loan assistance for women through NGO for undertaking non-farm activities , who usually have no easy access to credit from banks due to cumbersome procedures and because of their inability to provide adequate security demanded by banks in the form of collaterals. GOI Grant and the loan portion from the lending agencies to assist such women shall be routed through NGOs engaged in assisting poor women through income generating activities. Only those NGOs, who are having considerable experience ( minimum 3 years) in taking and managing funds, taken either as loan or grant, shall be eligible under the Scheme. While the loan amount will be passed on to women beneficiaries, the Grant shall be utilized by the NGOs for activities accepted as grant activities in the appraisal report of the lending agency and capacity building of the NGOs. NGOs will be free to approach lending agencies of their choice, but such lending agencies are to be approved by the respective State/UT Governments and finally by the Office of the DC (MSME). The Government Grant portion would be finally approved by the Steering Committee, after taking into account the appraisal of the Project Costs by lending agency (ies) and, their in principle acceptance to grant the loan component and GoI grant component. The NGO which has been selected for Government Grant will not be considered for GoI grant again in the subsequent two years from the date of release of GoI grant

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