MSME Innovative (Design) Scheme

MSME innovative (Design) Scheme is a new concept of MSMEs launched on 10^th March, 2022 aims to assist small businesses dealing with challenges related to finance. It is a part of the larger MSME Champion Scheme. It acts as a hub for innovation activities for development of ideas into viable business propositions and directly benefit to the society.

Key Features / benefits of MSME Innovative (Design) Scheme

• Common Platform: Main object is to bring Indian Manufacturing Sector and Design Expertize / Design Fraternity on a common platform

• Expert Advice: Another object is to provide expert advice to develop a new product and how to improve the developed product. It also provide advice on existing products portfolios.

• Cost-effective Solutions: The scheme also aims to provide a cost-effective solutions on real time problems on development of products and its continuous improvement as well as for existing products also.

• Value Addition: It also helps in value addition in all aspects of design so that MSMEs realize and achieve their design-related objectives.

How objectives of the scheme can be achieved?

1. Design Project: This scheme provides consultancy and intervene to facilitate and develop new design strategy and design related products.
2. Design Awareness programme: By conducting seminars, talks, workshops, etc. the scheme aims to create general awareness and exposure about the value and power of designs for businesses.

Financial Assistance

Financial assistance is available for two types of projects.

Design Project:

1. Funds will be utilized for the expenses of involvement of Design Consultants and expenses related to prototype / product.
2. For any approved project 75% (For Micro) and 60% (For Small and Medium) of total project costs will be contributed by Government of India. However the maximum financial assistance will be capped upto ` 40 Lakhs. Hence, remaining cost will be borne by the Enterprise
3. Approved funds i.e. 75% or 60% (Upto ` 40 Lakh) will be provided as grant in three stages
   • Strategy and Concept – 40%
   • Detail design – 30%
   • Successful completion of prototype / product and final report submission – 30%
4. Design project must be completed within a period of 1 year from the date of financial assistance and Utilization Certification (UC) is submitted accordingly.
5. If MSMEs drops out the project, penalty will be imposed by PMAC as it decides.

Student Design Project:

1. This can be availed by all students of any institutions accredited by AICTE / UGC.
2. This must be facilitate student participation to help MSMEs for design capabilities. Participation is done through either MSMEs approach to student or student offer its service to MSMEs.
3. Financial assistance is available under this project is 75% of total cost up to ` 2.5 Lakh. Remaining costs will be borne by MSMEs
4. Admissible costs for this projects
   • Student Designer’s stipend (till the completion of the project)
   • Conveyance related to project
   • Documentation and expense related to prototype / product / model
5. Funding will be released in the form of grants in two stages as below:
   • Application approval – 50%
   • Successful completion and final report submission – 50%
6. Design project must be completed within a period of 1 year from the date of financial assistance and Utilization Certification (UC) is submitted accordingly.
7. If MSMEs drops out the project, penalty will be imposed by PMAC as it decides.

Who is Eligible for this scheme?

1. The unit must be a registered Micro, Small or Medium Enterprise as defined in Micro, Small and Medium Enterprise Development Act, 2006
2. The unit should have a valid UAM or Udyam Registration
3. If unit is manufacturing, it preferably be profitable in last one year of its operation
4. Designer should be a qualified Industrial Designer having a relevant experience in that field.

Official Website for MSME Innovative (Design) Scheme

The eligible applicant may apply at the online portal: https://innovative.msme.gov.in

Online Application for MSME Innovative (Design) Scheme

An eligible entity can apply online at https://innovative.msme.gov.in/Forms/Register

Project selection and approval procedure

1. MSMEs submits their design project to nominated implementing Agencies (IAs)
2. Primary checks done by IAs and seek clarification or supplementary information from applicant (Designer / MSMEs)
3. IAs will carry out due diligence by setting Project Assessment Panel (PAP). PAP would comprise MSME-DI officials, professionals, industrialist, businessmen, designers, academics or other expert individuals. The functions of PAP is to evaluate the projects submitted by MSMEs in terms of project costs, make recommendation and monitor approved application. The proposal will be discussed and reviewed by PAP for which applicant design consultant and MSMEs may require to present at the assessment meeting if it is required to present their application and to answer the questions from PAP.
4. PAP will forward the recommended projects to Ministry of MSMEs for approval of Project Monitoring and Advisory Committee (PMAC)
5. When PMAC will approve design project, release of fund will be initiated.

Application assessment

Application assessment will be based on the measurable positive difference that a design intervention can bring to the MSME. This can be measured in terms of absolute revenues, indicating higher profits, or in percentage terms.

Factors Considered for Application Assessment

1. Integration of Design into Business Process: Evaluation of how the project can help incorporate design into the organization’s overall business process.
2. Transformation of Design into Tradable Deliverables: Consideration of the project’s potential to convert design activities into intellectual property assets such as patents, copyrights, know-how, or industrial designs.
3. Value Addition and Increased Competitiveness: Assessment of how the project can enhance the value of the products and increase their competitiveness in the market.
4. Commercialization and Pathways to Market: Evaluation of the project’s potential to facilitate the commercialization of new products and identify effective pathways to reach the market.
5. Contribution to Cost Competitiveness and Efficiency: Consideration of how the project can contribute to cost competitiveness, energy efficiency, environmental impact, process/product efficiency, quality enhancement, waste reduction, material optimization, safety improvements, ergonomic improvements, and aesthetic enhancements.
6. Innovation and Uniqueness: Assessment of the project’s level of innovation and uniqueness in its approach or solution.
7. Up scaling and Replication Potential: Evaluation of the project’s potential for expansion and replication in different contexts or markets.
8. Contribution to Import Substitution and Export Enhancement: Consideration of how the project can contribute to import substitution by reducing reliance on imported goods and enhance export opportunities.

Note: It is crucial to communicate with the respective IA for any necessary corrections or clarifications before the final project submission. Once the project details are submitted to the IA, they cannot be changed. Therefore, review and finalize all project information before submission.

For more details regarding Micro, Small and Medium Enterprises (MSMEs) please visit https://dcmsme.gov.in

Frequently Asked Questions (FAQ)

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