Extract of Guidelines of Incubation Scheme

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Extract of Guidelines of Incubation Scheme

For the Implementation of Up-Scaled

“Support for Entrepreneurial and Managerial

Development of MSMEs through Incubators”

A Component of

National Manufacturing Competitiveness Programme

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.


3.4.2Grant 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 Incubatee.

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 the HI.

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.


4.1 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.

To read full guidelines click here

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