Evaluation Study MSE Cluster Development - Ministry of Micro ...

ANNEXURE – 1.1 Guidelines for Cluster Development ProgrammeThe current guidelines were issued in March 2006 having the following salient featuresIntroduction1. The Ministry of Small Scale Industries (SSI), Government of India (GoI) has adoptedthe cluster approach as a key strategy for enhancing the productivity andcompetitiveness as well as capacity building of small enterprises (including small scaleindustries and small scale service and business entities) and their collectives in thecountry. Among other things, this approach also facilitates substantial economies of scalein terms of deployment of available resources for effective implementation and moresustainable results in the medium to long term.2. In view of the large number and dispersed locations of the small enterprise clustersand varied status of collaborative self-help capabilities of these cluster-based enterprisesacross the country, the success of this Programme depends not only the initiatives of thecluster-based enterprises but also on the active involvement of the State Governmentsand other institutions engaged in the promotion of small enterprises. The followingguidelines are, therefore, issued, in super session of the existing guidelines, to assist allthe stakeholders in formulating proposals for financial support from the Ministry of SmallScale Industries for implementation of cluster development initiatives under the SmallIndustries Cluster Development Programme (SICDP).Implementing Agencies3.1 A clear legal entity with evidence of prior experience of positive collaboration amongits members, whether formally or otherwise, as the applicant of the proposed clusterdevelopment initiative assures sound management. Ideally, therefore, all proposals forcluster development seeking assistance under the SICDP must emanate from specialpurpose vehicles (SPV), consisting of the actual/likely cluster beneficiaries/enterprisesorganised in any legally recognised form like a cooperative society, registered society,trust, company, etc.3.2.1 Considering, however, the uneven state of development of such collaborativeinitiatives among small (and tiny or micro) enterprises in the country, it would bepermissible for a lead Government institution to be the prime mover of a proposal forcluster development in the initial stages of its conceptualisation, design, determination oftechnical parameters, project preparation and documentation, etc., in consultation withthe cluster beneficiaries. It will, however, be necessary to constitute the SPV at theearliest possible, with clear indication of the time frame for completion of this essentialrequirement while submitting the proposal for Government assistance.3.2.2 In short, in addition to the SPVs of cluster beneficiaries, institutions/ agencies ofthe following categories will, therefore, be eligible to propose and implement clusterdevelopment projects under the SICDP, with financial support of the Ministry of SSI21