Support for Entrepreneurial and Managerial Development of MSMEs through Incubators
Globally, technology and its rapid expansion and adoption is becoming a critical
factor in is impacting almost all sectors. Technology is also deciding the way Micro,
Small and Medium Enterprises (MSMEs) expand in the global economy while playing
an important role in the national economic development.
Driving economic growth. The rise of technologies such as artificial intelligence, Internet
of Things as well as blockchain
The Finance Minister’s Budget speech of 2018-19 specifically mentions the importance of block chains and artificial intelligence while protecting our (big) data through cyber security. In this rapidly changing world, competitiveness of MSMEs needs to be maintained through continuous innovation and to build adequate support infrastructure to nurture such innovation. We need to have Business Incubators (BI) for enabling the MSMEs to develop innovative ideas that are not only useful for MSMEs but also for the complete industrial ecosystem. BIs are also required for assisting in commercialization of such ideas thereby accelerate such technologies from ideas to successful businesses and generate employment opportunities. The BIs will act as Entrepreneurship Support Organisation while Enablers will accelerate the revenue of MSMEs through technology and commercial inputs.
The components under the program will include mentoring support in business and technology, networking with other businesses, seed capital assistance, professional assistance to make the enterprise successful and achieve higher growth. Technology based new enterprises are typically characterized as high risk and high growth ventures, and as such, they require an enabling environment like BI to enhance the prospects of success.
2.1 The main objective of the scheme is to promote & support untapped creativity of
individual and to promote adoption of latest technologies in manufacturing as well as
knowledge based innovative MSMEs (ventures) that seek the validation of their ideas at
the proof of concept level. The scheme also supports engagement with Enablers who
will advise such MSMEs in expanding the business by supporting them in design,
strategy and execution. The Enablers will play a pivotal role and would be integral part
of the business development.
3.0 COMPONENTS OF SCHEMES
3.4.2Grant in Aid to HI for developing and nurturing the ideas up to max. Rs.
15.00 lakh per idea
GoI assistance up to max. Rs. 15 lakh per idea shall be provided to HI .
Preferably, the duration of the project/idea is one year, however, the same can be
extended depending upon the circumstances. For students, the contribution will be Nil
and for MSMEs/others, contribution will be 15 % of total project cost. Funds will be
released in following two installments:
1. 70% of the approved project cost as per Table after approval of the idea
by committee and signing of agreement between Host Institute and
2. 30% of the approved project cost after utilization of 80 % of 1st
installment utilized and submission of physical verification report by
concerned Implementing Agency (IA).
In case, an Incubatee leaves the idea / project unfinished, then the work /
development done by the incubatee can be progressed by HI by engaging other
deserving incubate(s) to further completing the idea / project, if considered worthy by
3.4.3SEED Capital support fund for setting up of Startups:
Assistance of up to Rs.1.00 cr as grants in aid for the seed capital support to
appropriate Incubates shall be provided. Financial assistance may be given in the form
of soft loan, interest free loan, equity participation, grant or combination of these etc.
Various expert agencies may be empanelled as Business Enablers with the
approval of PMAC and they will play a pivotal role in commercialization of ideas. They will get associated with projects/ideas at the time of seeking SEED capital support.
Enablers will prepare business plans of ideas for its commercialization and also conduct
market survey and provide necessary consultancy or advisory services on various
issues involved in commercialization of idea. Business plan should also include
recovery mechanism of SEED capital support to HI so as to be utilized for other
projects. They will play a crucial role in getting the MSME selected for Proof of Concept
validation as well as the seed funding round. Process and methodology for engaging
Enablers will be decided and approved by committee. Fees paid to Enablers will be
covered under the SEED Capital support fund.
4.0 IMPLEMENTATION OF THE SCHEME
4.1 The scheme is proposed to be implemented up to financial year 2019-20.
4.2 A National Monitoring and Implementation Unit (NMIU) shall be setup in the O/o
DC(MSME) for facilitation, implementation and monitoring of the scheme involving
Implementing Agencies as per directions of PMAC.
4.3 Implementing Agencies (IAs) shall be at MSME DIs / TCs / Govt. of India/ State
Government and its organizations. Detailed criteria of selection and role of IAs shall be
laid down by NMIU with the approval of PMAC.
A Project Monitoring and Advisory Committee (PMAC) set up in the O/o
DC,MSME will look after the planning, screening / identification of interventions /
projects and such other functions as may be necessary to ensure effective
implementation of the scheme. PMAC will be empowered to take all key decisions
related to the scheme and to approve minor modifications/procedural changes in the
guideline for operational expediency.
PMAC will hold its meeting as and when required.
4.5 Portal/MIS will be developed for online operationalisation of scheme. Proposals
will be submitted to IAs and after initial scrutiny; same will be put up to PMAC through
NMIU for consideration and approval
4.6 Eligibility Criteria for MSMEs: All MSMEs registered under MSME Act 2006 as
amended from time to time and also MSMEs which are included as per executive orders
issued by Office of DC (MSME) consistent with MSME Act from time to time.