Micro and Small Enterprises (MSEs) are recognized as an important constituent of the national economies, contributing significantly to employment expansion and poverty alleviation. Recognizing the importance of micro and small enterprises, which constitute an important segment of Indian economy in terms of their contribution to country’s industrial production, exports, employment and creation of entrepreneurial base, the Central and state Governments have been implementing several schemes and programmes for promotion and development of these enterprises including Scheme for Support for Entrepreneurial and Managerial Development of SMEs through Incubators.

These initiatives under the NMCP have been formulated with the main goal of increasing productivity, up gradation of technology and conservation of energy within the manufacturing processes, along with the goal of expanding the domestic and global market share of Indian MSME products everywhere. Within the guidelines of this programme, ten of the following components have been conceptualised:

• Lean Manufacturing Competiveness Scheme
• Enabling manufacturing sector to be competitive through Quality Management Standards/Quality Technology Tools (QMS/QTT)
• Promotion of ICT (Information & Communication Technology) in MSME sector.
• Technology and Quality upgradation Support to MSMEs (TEQUP)
• Marketing Assistance and Technology Upgradation Scheme
• Marketing Support/Assistance to SMEs (Bar Code)
• Design Clinic Scheme for Design Expertise to MSME sector
• Setting up of Mini Tool Rooms
• National campaign for building awareness on Intellectual Property Rights (IPR)
• Support for Entrepreneurial and Managerial Development of SMEs through Incubators
• This therefore implies that the success of such an NMCP depends entirely upon the active support and complete involvement of the State Governments, Industry Associations as well as other stakeholders such as technical institutions and professionals within the industry.

Description

The objective of the scheme scheme is to provide early stage funding to nurture innovative business ideas (new indigenous technology, processes, products, procedures, etc.) that could be commercialised in a year. The scheme provides financial assistance for setting up business incubators.

Nature of assistance

Funding support for setting up of ‘Business Incubators (BI)’: The cost may vary from Rs 4 to 8 lakh for each incubatee/idea, subject to overall ceiling of Rs 62.5 lakh for each BI. a) Upgradation of infrastructure Rs 2.50 lakh b) Orientation/training Rs 1.28 lakh c) Administrative expenses Rs 0.22 lakh Total assistance per BI Rs 66.50 lakh

Who can apply?

Any individual or MSME with innovative ideas ready for commercialisation can apply to the host institution (e.g., IITs, NITs, technical colleges, research institutes, etc.) in order to obtain fund support. Any technical institution (as given in the EoI) that wants to become a host institution can apply to the office of the Development Commissioner-MSME or their nearest MSME-DI for funding support.

Objective

The main objective of the scheme is to promote emerging technological and knowledge-based innovative ventures that require enhancing ideas from professionals. These ideas are developed in a supportive environment before they are utilised for venture capital. It also promotes networking and forging on linkages with other constituents of the innovation chain for commercialisation of their developments. This initiative has been taken up the Ministry of MSME, the nodal Ministry for the development of entrepreneurship and creation of self-employment and employment avenues.

Implementing Agencies

The incubation support is provided by Host Institutions namely

• Indian Institutes of Technology (IITs)
• National Institutes of Technology (NIITs)
• Engineering colleges
• Technology Development Centres, tool rooms, etc.
• Other recognised R&D/Technical Institutes/centres, Development Institutes of DIP&P in the field of paper, rubber, machine tools etc.

The geographical regions, the disciplines and the infrastructure-providers that are listed will be reviewed at the time of implementation.

Targets

In every Business Incubator, efforts will be made to attain the ratio of 4:1 between the incubated micro and small enterprises. It is also permissible to have more than one Business Incubators (BI) in the same host Institution.

Financial Assistance

The authority has decided to set up 100 Business Incubators to incubate 1000 ideas, that results in establishing Small and Micro Enterprises at the cost of Rs. 62.50 crore within four years. A sum of Rs. 4 Crore is set aside for minor components, and the total cost estimated for the project is Rs. 66.5 crore. The BI maintains separate accounts of the funds that are received and the funds used for expenses of various activities. Moreover, an audited Statement of Accounts or a statement certified by the Chief Financial Officer of the Host Institution would be obtained.

Implementation of the Scheme

The selection committee comprises of

1. Representatives from DST/DSIR
2. CEO, SVCL (SIDBI Venture Capital Limited)
3. CMD, NSIC
4. Economic Adviser, MoMSME
5. FA of MoMSME
6. Representatives from DIPP

The request for proposals is from the institutes/implementing agencies would be invited by the Selection Committee by advertising in websites and newspapers, letters to implementing agencies etc., to select the host institutes to set up BIs.

The Selection Committee comprises of sub-committees for specific product groups to examine the feasibility of ideas and proof of concepts, the option of the entrepreneur for host institute, access to workshop and laboratory etc. and produces the procedure to release the fund directly to the host institutions. A sub-committee managed by Industrial Adviser of Development Commissioner (MSME) comprises of

1. Director of Apex Scientific/Industrial Research Institute in the concerned field or representative.
2. Incubation Executive nominated by the Director, MSME-DI in the area of Incubation Center.
3. A representative of Lead Bank in the area of Incubation Centre.
4. A representative of Host Institute.