What Is MSME Cluster Development? Programme Initiatives, Objectives And How To Apply?

What is MSME Cluster Development?

It has been announced that the SIDBI (Small Industries Development Bank of India) has launched significant MSME cluster development initiatives for the welfare of MSMEs. At present, the SIDBI is planning to consider about 100 clusters. At the same time, it’s even concentrating on forming 15 more clusters for the future development of MSMEs.

Well, if you’re confused with the term “Cluster”, let us explain it to you clearly. Usually, clusters are nothing but the group of organizations or enterprises that fall into the same category based on their services or products. The clusters are classified based on the types of services or products the enterprise sells to the customers. The MSME cluster development initiatives have been initiated to ensure the higher impact of MSMEs on local and non-local markets, including global markets.

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Would you delve deeper into the MSME cluster development initiatives? If yes, read the entire article to know more about the scheme, how to apply it, objectives, achievements and other details.

What is MSME Cluster Development?

Recently, The Ministry of Micro, Small, and Medium Enterprises adopted this kind of development strategy, namely, MSME Cluster Development, to enhance the competitiveness of the MSEs in the local and global markets. A few small and micro enterprises form a cluster based on the various characteristics.

The primary aspect by which the enterprises are formed into clusters are as follows:

  • Industry practises practised by the enterprises during the product production such as quality control, testing, pollution control, etc.
  • Clusters are also formed based on the technology used during production, the necessity of communication channels for marketing, common challenges, and opportunities of the enterprises.

Considering various factors, a few enterprises are categorized in a certain cluster that makes the development of small and micro businesses feasible.

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Objectives of MSME Cluster Development

The MSME cluster development has been initiated majorly to ensure the following things to the micro and small businesses.

  • To support the growth and welfare of MSEs (Micro and Small Enterprises) by providing district technology, tool up-gradation, skill development, market access, quality enhancement, etc.
  • To upgrade the infrastructure amenities in the emerging and existing industrial sectors.
  • To form the specific centres for SMEs to enhance testing, training centres, and production processes.
  • To form self-help groups, associations, etc., ensuring support to micro and small businesses for taking supportive action in case of emergencies.

In addition, this scheme includes five major components to achieve the above-mentioned objectives. These include –

  1. Common Facility Centres (CFCs)
  2. Infrastructure Development
  3. Marketing Hubs
  4. Training Sessions & Enterprise Strengthening (Thematic Interventions)
  5. Support to State Innovative Cluster Development Programme

All these components contribute to the growth of SMEs.

What are MSME Cluster Development Initiatives?

SIDBI (Small Industries Development Bank of India) has been providing colossal support for the growth of small and micro businesses in all aspects. It provides a variety of resources from technology tools to up-gradation to marketing through distinct MSME cluster development initiatives. According to the recent press release, it’s known that the SIDBI has undertaken over 600 MSME clusters effortlessly.

Although there are numerous initiatives taken to develop micro and small businesses –

  • EU Switch Asia left the companies with great impact. It has had a huge impact on over 18 clusters in nine Indian states.
  • Cluster outreach programmes have also outperformed to enhance the growth of small enterprises.
  • During these programmes, the government has built PMUs (Project Management Units) in around 11 Indian states.
  • PMUs (Project Management Units) initiative held a robust connection between the clusters and the state government.
  • Similarly, the SRLM (State Rural Livelihood Mission) and ODOP (One District One Product) are other two great initiatives that supported the growth of micro and small enterprises.
  • The ODOP initiative gave hope to several micro-businesses to compete in the local markets.

These are the few most popular initiatives which drove the ultimate impact on micro and small businesses.

Achievements of MSME Cluster Development Initiatives

The MSME cluster development initiatives have shown a huge impact on enterprises.

  • It provides skill training, up-gradation, and numerous resources of the business to compete with market trends.
  • The scheme initiatives massively supported and provided the technical tools and market access for the small businesses.
  • It even provided escort services to the users for enabling loans and funds.

These are the few achievements of the MSME cluster development initiatives which have benefited the micro and small enterprises.

Learn more about – What is a Small Scale Enterprise? Its Types & Registration Process Explained

How to Apply for MSME Cluster Development?

Small businesses can avail of Cluster Development either by applying online or offline. Visit the nearby government authorities or autonomous bodies for offline application. In comparison, you can avail and apply online applications effortlessly by visiting the official website. All you need to do is fill the Cluster Development application form and submit it.

Frequently Asked Questions

What is Cluster development in MSME?

The Cluster Development is initiated by the Ministry of Micro, Small, and Medium Enterprises to support the growth and welfare of the MSEs (Micro and Small Enterprises). Usually, this development strategy aims to enhance support to micro and small businesses in terms of technical abilities, market access, capital gains, etc.

What are the major clusters in India?

There are six major clusters in India, including Hooghly Industrial Belt, Mumbai-Pune Industrial Region, Ahmedabad-Vadodara Region, Madurai-Coimbatore-Bengaluru Region, Agra-Mathura-Meerut, Saharanpur belt, and finally, Faridabad-Gurgaon-Ambala Belts.

What’s the primary objective of Cluster Development in India?

The major objective of Cluster Development is to provide support to micro and small businesses to compete with the national and international markets. This scheme supports the growth and welfare of these enterprises.

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