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

Chapter No: 5– The Special Purpose Vehcileintervention. This process of selection must be devoid of subjective and politicalconsiderations that lead to the improper selection of the cluster and the subsequentfailure or lack of impact of the SICDP. This clearly highlights the importance of thediagnostic study and the proper selection and training of CDEs. These issues have beenmore elaborately treated in earlier chapters.The level of involvement or inclusiveness of the individual cluster actors in the SPVs isalso indicated and classified into two simple categories H and L. This has been compiledusing figures related to initial membership at the time of registration, presentmembership, the percentage change in membership, as well as the total number ofindividual cluster units in each of the clusters covered during the study.The involvement of cluster members depends on how keen and motivated they are onbeing a part of the SPV. There keenness will also depend on how aware they are of thebenefits of common facilities as compared to the risks and financial commitmentsinvolved. Initially there may be only a few who are willing to join however as thecommon facility project gets approved and starts to unfold more persons may beattracted to join the SPV. These late applicants may or may not be encouraged to joinas SPV members by the existing incumbents, even if such late admission involves asubstantially higher financial commitment in terms of share money. Moreover there maybe statutory upper limit on the number of shareholders permitted depending on theorganizational form adopted. In the case of a private limited company for instance thislimit is fixed at 49 members. However even this statutory limit can be extended to coverall cluster actors by allowing shares to be collectively held by “holding companies”formed by a group of individual cluster actors.The degree of involvement and inclusiveness will be high if a large numbers if not all theindividual members are shareholders in the SPV formed and registered. The degree ofinclusiveness would be high if the existing members of the SPV encourage moremembers to join even at a later stage and constantly encourage enhanced involvementand participation by those who initially prefer to stay out but later do not want to missthe boat.In Table 5.1 we see that the level of involvement and inclusiveness varies among the 11SPVs covered during the study. In the case of 5 SPVs the involvement and inclusivenessis observed to be high. Four of these 5 SPVs are registered as societies while only one ofthem is registered as a private limited company. Not all these clusters that these SPVsrepresent are large, indicating that democratic participation, involvement andinclusiveness in a SPV does not really depend on whether the cluster is large or small butis certainly determined by the organizational form adopted by the SPV representing thecluster. In the case of 6 SPVs, the involvement and inclusiveness is low, among these 3are registered as private limited companies while the remaining three are registeredsocieties. Here again these SPVs represent, both large and small clusters, and so thesize of the cluster does not have much to do with explaining involvement andinclusiveness. However take the case of the Wet Grinder Cluster in Coimbatore havingas many as 700 individual units and thus a large and dense cluster making it most viableand sustainable yet surprisingly at the time of registration of its SPV as a society, as farback as 2005, it had only 30 members. To make matters worse, in 2008 March, when96