Government of India

GUIDELINES

MSME INNOVATIVE SCHEME

(A component of MSME Champions Scheme)
(2022)

O/o DEVELOPMENT COMMISSIONER (MSME)

GOVERNMENT OF INDIA, NIRMAN BHAWAN, NEW DELHI-110 108
GUIDELINES/ MSME INNOVATIVE/ 2021-2022 1
[Link]
 CONTENTS

CONTENTS
ABBREVIATIONS ........................................................................................................................ 3
1. INTRODUCTION................................................................................................................. 4
CONTENTS
2. ABOUT “MSME INNOVATIVE” SCHEME ............................................................... 4
3. SCHEME OBJECTIVES .................................................................................................... 4
CONTENTS
4. ACTIVITIES ............................................................................................................................ 5
4.1. INCUBATION COMPONENT…………………………………………………………5
4.2. DESIGN COMPONENT……………………………………………………………….11
4.3. INTELLECTUAL PROPERTY RIGHTS (IPR) COMPONENT…………………..14
5. COMPONENTS APPLICABLE TO ALL SUB-SCHEMES .................................. 18
5.1. Awareness & Training Activities .................................................................................. 19
5.2. Financial Assistance for SEED Capital support for Incubation/Design Schemes....20
5.3. Digital Platform .............................................................................................................. 22
5.4. Publicity & Promotion…………………………………………………………………22
6. COMMON STAKEHOLDERS & THEIR EXPECTED ROLE....................................... 23
7. INTEROPERABILITY ARRANGEMENTS .............................................................. 24

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 2

ABBREVIATIONS
Development Commissioner (Micro, Small and Medium
DC (MSME)
Enterprise)
BI Business Incubator
C & AG Comptroller & Auditor General
CLCS-TUS Credit Linked Capital Subsidy-Technology Upgradation Scheme
DAVP Directorate of Advertising & Visual Publicity
DIC District Industries Centres
GFR General Financial Rules
GI Geographical Indication
GoI Government of India
HI Host Institute
IA Implementing Agency
IPR Intellectual Property Rights
IPFC Intellectual Property Facilitation Centres
MoU Memorandum of Understanding
MIS Management Information System
MSME Micro, Small and Medium Enterprises
MSME – DI Micro, Small and Medium Enterprises – Development Institute
NSIC National Small Scale Industries Corporation
PAP Project Assessment Panel
PCT Patent Cooperation Treaty
PIB Press Information Bureau
PMAC Project Monitoring and Advisory Committee
PMU Project Management Unit
TC Technology Centre
TM Trade Mark
TRA Trust & Retention Account
UAM Udyog Aadhaar Memorandum
UC Utilization Certificate
ZED Zero Defect Zero Effect

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 3

1. INTRODUCTION
MSMEs are the strongest drivers of Nation’s economic development, innovation and
employment. It becomes imperative to strengthen MSME’s ecosystem by developing
innovative solutions and applications which will help them to move up the value chain. The
Government of India, therefore, envisioned creating MSME Innovative Scheme through
combination of Incubation, Design intervention and IPR protection initiatives to enhance
MSME competitiveness and transform them as National and International Champions.

2. ABOUT “MSME INNOVATIVE” SCHEME

MSME Innovative Scheme will be an amalgamation of the Incubation, Design and IPR
Schemes of the Ministry of MSME. These erstwhile
three schemes will operate as separate verticals with
interflows and connections. These verticals will also
be integrated sequentially and parallelly into one
singular formulation to promote and encourage
innovative activities for improved synergy and higher
efficiency.
MSME Innovative is a new concept for MSMEs with
a combination of innovation in incubation, design
intervention and by protecting IPR in a single mode
approach to create awareness amongst MSMEs about
India’s innovation and motivate them to become
MSME Champions. This will act as a hub for innovation activities facilitating and guiding
development of ideas into viable business proposition that can benefit society directly and
can be marketed successfully.
MSME Innovative Champions is a holistic approach to unify, synergize and converge 3 sub-
schemes and interventions with a single purpose. The implementation agencies (Host
Institutes, IISc, IITs, NITs and IPFCs, etc.) will be common for these sub schemes for taking
them through the initial stage of idea conceptualization to handholding to business
development to final growth and outreach.

3. SCHEME OBJECTIVES
❖ To promote all forms of innovations in the complete value chain from developing ideas
into innovative applications through incubation and design interventions.
❖ To provide appropriate facilities and support for development of concept to market,
design competitiveness and protection & commercialization of intellectual creations of
MSME sector.
❖ To promote a culture of innovation and creative problem solving through knowledge
sharing and collaboration amongst industry, academia, government institutions, research
laboratories etc.
❖ To serve as a connecting link between industrial/academia leaders and innovators, in
order to encourage new product development and hand-holding.
❖ To focus on developing affordable innovations that can benefit a large number of people
and at the same time being commercially viable and sustainable.

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 4

INCUBATION: The primary objective of the scheme is to promote and support untapped creativity
and to promote adoption of latest technologies in MSMEs 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.
DESIGN: The objective of this component is to bring Indian manufacturing sector and
Design expertise/ Design fraternity on to a common platform. It aims to provide
expert advice and cost-effective solution on real time design problems for new
product development, its continuous improvement and value addition in
existing/new products.
The Design scheme will help MSMEs to avail advice on all aspects of design. It
helps MSMEs realize and achieve their design-related objectives. This specialist
advice will be provided by experienced designers for new product development as
well as enhancing existing product portfolio.
IPR: The objective of the scheme is to improve the IP culture in India with the
following interventions:
• To enhance the awareness of Intellectual Property Rights (IPRs) amongst the
MSMEs and to encourage creative intellectual endeavour in Indian economy;
• To take suitable measures for the protection of ideas, technological innovation
and knowledge-driven business strategies developed by the MSMEs for their
commercialization and effective utilization of IPR tools.

4. ACTIVITIES
MSME Innovative Scheme will be the combination of Incubation, Design and IPR Schemes
of the Ministry of MSME. These three schemes will operate as separate verticals and the
scheme-wise activities which will be a part of the Innovative Scheme is as enumerated below:
4.1. INCUBATION COMPONENT
 Recognition of eligible institutions as Host Institute (HI) to act as Business
Incubator (BI)
 Approval of Ideas of Incubatees submitted through Host Institute (HI)
 Assistance for nurturing of Ideas to HI
 Assistance towards Capital Support to HI for Plant and Machinery

A. Eligibility Criteria: Registration as Host Institute (HI)

Institutions such as Technical Colleges, Universities, other Professional Colleges/Institutes,
R&D Institutes, NGOs involved in incubation activities, MSME-DIs/ Technology Centres or
any Institute/Organization of Central/State Government may apply for registration as an HI
and act as a Business Incubator (BI) for nurturing of ideas from the initial stage of
conceptualization to the commercialization stage through HIs/ BIs. The institutions may
apply for registration as HI through the MIS portal of the DC MSME website
([Link] All earlier approved Host Institutes (HIs) will be continued
as HI for scheme implementation.

B. Approval of Ideas of Incubatees submitted through Host Institute (HI)

After getting approved as HI for the Incubation Scheme, the HI may invite ideas from
MSME/others and after due diligence may submit the selected ideas through the MIS portal
of the DC MSME website ([Link]
These ideas will be evaluated/approved by a committee in the Ministry of MSME per the
following procedure:

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 5

Process Flow
The ideas submitted by the applicants will undergo following stages:

Stage 1- At HI Level
• On receipt of ideas from different incubatees, the HI shall first get them evaluated from
experts of different institutions/industries at their end. Only the shortlisted ideas may be
uploaded on the incubation portal ([Link]
Stage 2 - First Stage Screening
• After receiving shortlisted ideas from HI, the PMU will carry out the first stage
screening. Only those ideas will be processed which have been received with relevant
and appropriate information, fulfilling all the obligatory conditions as per the scheme
guidelines. If the idea uploaded is incomplete/or with incoherent information, the idea
will be liable for rejection.
• This will then be counter-checked by the programme division to ensure no eligible idea
has been left out. Thereafter the screened ideas will be forwarded to the Domain Expert
Selection Committees (DESCs)
Stage 3 - Selection of Ideas by Domain Expert Selection Committee (DESC)

• The ideas received would be segregated into the following five verticals, which will be
evaluated by five DESCs.
• These five Domain Expert Selection Committees (DESCs) will comprise experts from
the Industry/Academia/Government in these five verticals. There will be a provision for
honorarium as per GFR for the experts. One expert from MSME DI and one member
from the programme division for coordination will also constitute the DESC. DESCs will
select the ideas from the ideas forwarded to them subsequent to the first stage screening.

S. No. Sector Composition of DESC

1 Agriculture, Rivers & Ocean Produce based 1. Domain Experts from the
industries, fertilizers, Agricultural industry/academia/government.
Implements & Agro processing and any
related sub-sector 2. One Expert from MSME DI
3. One Member from Programme
Division

2. Healthcare & Life sciences, Medical Same as above

Devices, Pharmaceuticals, Biotech, AYUSH
and any related sub-sector

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 6

 3. Power, Renewables, Electricals, Power Same as above
Electronics, Energy Efficiency and any
related sub-sector
4. Services, Education, Hospitality, Media, Same as above
Publishing, Entertainment, Design, Wellness,
Logistics, Sports and any related sub-sector
5. Miscellaneous Sector (Environment, Forests, Same as above
Water & Sanitation; Foods, Beverages,
FMCG, Consumer Goods; Infrastructure,
Construction, Housing; IT, ITES,
Electronics, White Goods,
Telecommunication; Metals, Engineering,
Machinery, Automation and Transportation,
Automotive, E Vehicles, Railways, Aviation,
UAV and any other sub-sector)

• The DESC will evaluate the ideas as per the criteria above and would select ideas for
recommending to PMAC for final approval. To ensure all the sectors and verticals get
adequately represented, the number of ideas recommended must be in the ratio of them
being received. The cut off ratio will be indicated by the officer from the programme
division.
Stage 4 - PMAC
• After detailed evaluation by the DESCs, the recommended ideas would be forwarded to
the PMAC for final approval.
• The approved ideas will be granted financial assistance as per scheme guidelines for
further development.
C. Financial Assistance to HI for developing and nurturing the ideas
Financial Assistance up to maximum of Rs. 15 lakh per idea shall be provided to HI. Funds
will be released after the approval of the idea by PMAC. For the ideas approved of any
MSME/others, 15% of the total approved cost will be borne by them and deposited to the
HIs. The remaining 85% will be contributed by MoMSME up to a maximum of Rs. 15 lakh
per idea. However, students will not be required to pay any amount and the entire cost of idea
will be borne by Ministry of MSME up to a maximum of Rs. 15 lakhs per idea.
It should be followed up by providing a Utilisation Certificate (UC) duly approved by the HI
in-charge, failing which the HI will face penalties as decided by Project Monitoring and
Advisory Committee (PMAC) of MoMSME. Further, the HI will be subjected to random
checks and inspection by Ministry officials including MSME-DI (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 Incubatee(s) to further completing the idea
/ project. The unspent amount will be refunded to the Ministry.
Funds will be released in following two instalments:
(i) 70% of the approved project cost as per below mentioned table, after approval of the idea
by PMAC and signing of agreement between Host Institute and Incubatee.
(ii) 30% of the approved project cost after utilization of 60% of 1st instatement utilized and
submission of physical verification report by concerned Implementing Agency (IA).

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Table: Indicative list of activities and likely expenditure for the idea/ project are as
below (GoI assistance will be spent on pro-rata basis in the ratio of expenditure
mentioned in the table below, if the assistance is less than Rs. 15 lakh): -

S. No. Items Likely Expenditure

(Rs in lakh)
1. Technology related expenditure like machine usage 10.00
charges, electricity charges, procurement of raw
materials, testing/calibration charges and any other
technology related expenditure essential for
development of idea.
2. Charges for mentors/handholding supporting team. 3.00
3. Travelling Expenses or any other 2.00
overhead/administrative expenditure not covered above
may be allowed as per need for development of the
idea.
Total 15.00
Note: - After approval of idea/ project, variation up to 25 % of expenditure under various
subheads is permitted within the total budget of maximum up to Rs. 15.00 lakh per idea.

D. Financial assistance for Plant and Machinery to HI up to Rs. 1.00 cr. (max)
Financial Assistance for Plant and Machinery to HI up to Rs. 1.00 cr. (max) shall be provided
for procurement and installation of relevant plant and machines including hardware and
software etc. in BI for R&D activities and common facilities for incubatees of BI. This
assistance will be applicable to HIs who’s minimum two or more than two ideas have been
approved under the Incubation Scheme. The financial assistance will be applicable for
procurement of Plant and Machinery for development of those specific approved ideas. The
proposal may be uploaded by the HIs through the MIS portal of the DC MSME website
([Link] The approval of proposal for plant and machinery will be
done by PMAC on recommendation of a Domain Expert Selection Committee (DESC),
specifically set up for the purpose.
Mechanism of Selection, Disbursement and Management of Plant and Machinery
Support Selection:
For selection of beneficiaries for the Plant and Support fund, a Domain Expert Selection
Committee (DESC) comprising of various Government officials, Experts and the Industry
will be formed.
The proposed composition is as follows:
1. Joint Secretary, AFI, MoMSME, Chairman
2. Economic Adviser, MoMSME
3. Representative of Ministry of Heavy Industries
4. Representative of Niti Aayog dealing with AIC Programme
5. Representative of Ministry of Railways dealing with Plant and Machinery
6. Representative of IAs of MSME Innovative Scheme
7. Representative from MSME Associations (on rotation basis)
8. Any other member as decided by the Chairman, DESC
9. Director(T&P), MoMSME as Member Secretary of the Committee
Disbursement:
• This financial assistance will be provided upfront and the Utilisation Certificate for 50%
of the grant be provided within 9 months of the release of the money.

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• The complete UC for machinery and plant procurement and commissioning must be
submitted within 18 months, failing which, the HI will face penalties as decided by
PMAC.
• The financial support would cover the capital as well as maintenance expenditure for the
plant and machinery for maximum five years or till the validity of the scheme or
whichever is earlier.
• Expenditure, over and above of Rs. 1.00 cr., if any, would be met by HI on its own. Other
cost like expenditure towards land, building, human resources etc. is not covered under
this assistance.
• Any plant & machinery/infrastructure which was already present before receiving the
financial assistance would not be considered. Accordingly, a list of existing
equipment’s/plants/machinery is required to be submitted by the HI along with the
proposal.

Key aspects of funding to HI:

• HIs would be provided financial assistance for plant & machinery up-to Rs. 1 crore to
cover the capital and maintenance expenditures. The exact amount of the assistance shall
be decided by PMAC. Further, PMAC reserves the right to modify/terminate the support
at any stage, if it is convinced that the financial assistance/grant is not being utilized
properly.
• The plant & machinery procurement should be done within a maximum period of six
months from the date of receipt of the financial assistance. The procurement should be
done from open market at the option/choice of entrepreneurs with valid receipts/invoice
with GST number through open, competitive bidding process.
• Machinery can also be imported for which the beneficiary unit shall substantiate the
reason for import of machinery. In the case of imported machinery, the units shall
produce the invoice, shipping bill etc. certified by Customs Authorities/DGFT/Banks
with performance certificate from the supplier.
• The financial assistance under this component will be available to HIs who have not
availed any Central/State Government subsidy for the same purpose, for which periodic
confirmations from line ministries will be taken. An undertaking on notary stamp paper
to the effect that the applicant has neither applied for nor availed of assistance under any
programmes/components for the purpose of procurement of that plant and machinery,
will have to be furnished while applying for assistance. The proposed procurement will
be subjected to random checks and inspection by Ministry officials including MSME DI
(IA).
• HIs would be required to submit a Detailed Project Report (DPR) as a justification for the
requirement of appropriate plant and machinery for completing the project at the time of
application on the portal. Cost of any fee paid to any external agency/individual(s) for the
preparation of the DPR would not be borne by the O/o DC-MSME.
• The application, with all relevant documents and Detailed Project Report (DPR), shall be
filed online. The Officer of the field office of O/o DC-MSME will conduct on-the-spot
inspection of the unit, will verify all the documents, assess the quantum of financial
assistance required and recommend those cases, complete in all respects, to O/o DC-
MSME for obtaining sanction from the Competent Authority. Applications for financial
assistance will be duly examined by the above-mentioned officers to ascertain whether
the requirements have been duly complied with, and the acceptance/rejection of the
application will be communicated to the applicant within 30 days from the date of receipt
of the application. In case of rejection, detailed reason (s) thereof shall be communicated
to the applicant.

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• Host Institute shall have an account on PFMS Portal and PAN details with the same
name. In the case of mismatch, allocation of funds to the HI shall not be allowed. The
Host Institution shall maintain a separate account of the funds received and expenditure
incurred on various activities.
• Further, the Host Institute would submit Annual Accounts, Audited expenditure
Statement and Utilization Certificate to the Government as per procedure.
• The assets created through the scheme shall not be transferred/ disposed of without prior
permission of the Ministry of MSME, Government of India.
• The assistance received from the O/o DC-MSME under this component shall be
recoverable through legal means on the following grounds:
▪ Where the assistance under the scheme has been obtained by misrepresentation of
facts or by furnishing of false information; or where the machinery and premises of
the unit are used for purposes other than for which the assistance was availed.
▪ In case of any disputes with regard to grant of financial assistance under the scheme,
the decision of the PMAC shall be final.
E. Implementation Mechanism:
All MSME-DI/TCs will act as implementing agency (IAs). However, the MSME DIs will
not be eligible for Grant in Aid as per GFR. Any financial assistance to MSME DIs
would be through budgetary support through suitable budget head.
Role of Implementing Agency (IA):
a) The online proposals for registration as HIs will be forwarded to the IAs under whose
jurisdiction area the proposed HI will fall. In case the proposal is incomplete then IA will
revert to HI and get it completed from HI as per requirement of scheme. IAs will, after
physical verification of all the parameters filled in the application for registration by HIs,
forward its recommendation to the PMAC. IA needs to forward its recommendation to
PMAC within 15 days of receipt of proposal, complete in all respects.
b) IA before forwarding the proposal to DC Office may be sent to get for due
diligence/recognitions/ affiliations/complaints/ grievances/ present status/clearance from
AICTE /UGC and then the proposal should be forwarded with their proper
recommendation on MIS portal.
c) IA will function under the overall directions of PMAC and carry out all activities as
directed by PMAC.
d) After approval of financial assistance to any project of an HI, IA will ensure that the
project is completed within the time frame of the scheme guidelines. Upon completion of
the project, IA will submit a completion report and will submit the closure report to the
DC Office.
e) IA should ensure that HI not divert any part of the grant to any activity other than for
which it has been sanctioned.
f) All ideas should contain, inter-alia, following basic types of Innovation Processes:
 Marketing & Branding: Innovation related to the customer experience.
 Ideation: Innovation related to the product idea & concept.
 Technology: Innovation related to the product functionality.
 Co-creation: Innovation related to the customer involvement.
 Social Innovation: Innovation related to the corporate culture.
 Entrepreneurship: Innovation related to through entrepreneurial thinking.
 Open Innovation: Innovation related to with stakeholders.
 Business Model Innovation: Innovation related to the purpose and strategy.

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 10

4.2. DESIGN COMPONENT
The Design scheme is divided in two major parts, viz., Design Projects and Design
Awareness Programme.
4.2.1. Design Project: To facilitate MSMEs to develop new design strategies and or
design related products through interventions and consultancy.
4.2.2. Design Awareness Programme: The objective is to create general awareness
and sensitization about the value and power of design for businesses through
seminars, talks, workshops etc. The purpose of these activities is to sensitize MSMEs
about the usage of design/innovation in various facets of their industry.

A. Eligibility Criteria
The beneficiary unit(s) must typically be a registered micro, small or medium enterprises as
per the definition in MSMED and should have a valid UAM or Udyam Registration. The
manufacturing MSMEs may be a profitable entity preferably in the at least one year out of
last three financial years, PMAC can relax the criteria. The designer that a unit employs in
this scheme should be qualified Industrial designers having a relevant experience in that field.
Implementing agencies should verify all the relevant documents.

B. Financial Assistance under Design Component

i. Design Project - To facilitate MSMEs to develop new design strategies and or design
related products through interventions consultancy. MSMEs may submit their design
projects to the nominated IAs. The IAs will carry out due diligence by setting up of a
suitable Project Assessment Panel (PAP) for evaluating these projects and forward the
recommended projects to MoMSME for approval of PMAC. Funds will be released after
the approval of the Design Project by PMAC.
Financial assistance under this activity will be utilised for engagement of design
consultants for design interventions and expenses pertaining to development of
prototype/product. For the design projects approved for any MSME, 75% (Micro) and
60% (Small & Medium) of the total project cost will be contributed by GoI up to a
maximum of Rs. 40 lakh and the remaining project cost will be borne by MSMEs and
deposited to the IA. The total project cost will be provided as grant in 3 stages:
 Stage 1 – Strategy & Concept- 40%
 Stage 2 – Detail Design - 30%
 Stage 3 – Successful Completion of the prototype/product and Final Report
submission - 30%.
The IA must ensure completion of the design project within a period of one year of the
receipt of financial assistance and UC is submitted accordingly. In case, the MSME drops
out of the project, penalty will be imposed as decided by the Project Monitoring and
Advisory Committee (PMAC) of MoMSME.

ii. Student Design Project – This subcomponent can be availed by all the students of any
institution accredited by AICTE/UGC. The proposed student design project must
facilitate student participation into helping MSMEs achieve Design capabilities. Student
participation can be achieved in two ways—MSME can approach students or Student
can offer their services to MSMEs. MSME will submit the proposal for Student Design
project to the Implementation Agency under the Design Scheme, through the portal of
the scheme ([Link]
This component supports design work of bona-fide students by providing financial
assistance up to Rs. 2.5 lakh. For the student design projects approved for any
MSME,75% of the total project cost will be contributed by GoI up to a maximum of Rs.
2.5 lakh and the remaining project cost will be borne by MSME and deposited to the IA.

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 11

 This admissible cost would include student designer’s stipend (wherever applicable till the
completion of the project), conveyance related to the project, documentation and expenses
pertaining to development of prototype/model/product. The deliverables for the student
project will be specified clearly by the IAs. The funding grant will be reimbursed in 2
stages, in the following manner:
 Stage 1 – Application approval - 50%
 Stage 2 – Successful Completion and Final Report Submission - 50%.
The IA must ensure completion of the design project within a period of one year of the
receipt of financial assistance and UC is submitted accordingly. In case, the MSME drops
out of the project, penalty will be imposed as decided by the Project Monitoring and
Advisory Committee (PMAC) of MoMSME.

C. Project Selection Procedure

 The MSME would submit their application online on the portal through the IA. Upon
receipt of the application, the IA will conduct a preliminary screening and may seek
clarification or supplementary information from both the applicant design
Consultant/company and applicant MSME.
 After screening, IA will submit the application together with its recommendation to
Project Monitoring & Advisory Committee (PMAC) for consideration. Project proposal
should be discussed and reviewed in Project Assessment Panel (PAP) before presenting it
to the PMAC.
 The Project Assessment Panel (PAP) would comprise MSME-DI officials, professionals,
industrialists, businessmen, designers, academics or other expert individuals. Its functions
are to assess applications and project-costs, make recommendations, and monitor
approved applications.
 The applicant design Consultant/ company/academic institution and applicant MSME and
its project team members may be required to attend assessment meetings to present their
applications and answer questions.

D. Assessment Criteria
In considering an application, due consideration, inter-alia, will be given to the following
factors, wherever applicable:
 to what extent the project can help integrate design into business process;
 to what extent the project can help transform design activity into tradable deliverables
that manifests exploitation and deployment in the form of intellectual property, which
may comprise patent, copyright, know-how or industrial design;
 to what extent the project can add value to the products concerned and increase their
competitiveness;
 to what extent the project can help commercialisation of new products and finding
pathways to market;
 to what extent the project can contribute towards cost competitiveness, energy efficiency,
environmental impact, process/product efficiency, quality enhancement, waste reduction,
material optimisation, safety improvements, ergonomic and aesthetic enhancement;
 to what extent the project is innovative and unique;
 to what extent the project can exhibit upscaling and replication potential;
 to what extent the project can contribute towards import substitution/export enhancement;
The overall assessment criteria would be based on the measurable positive difference that a
design intervention will bring to the MSME, either in absolute revenues (indicating higher
profits) or in percentage terms.

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E. Implementation Mechanism

Implementing Agencies (IAs):

The implementing agencies for the Scheme, presently, are:
Indian Institute of Science (IISc), Bengaluru, IITs (Kanpur, Indore, BHU, Roorkee, Ropar,
Bhubaneshwar), NITs (Tiruchirappalli, Warangal, Silchar, Arunachal Pradesh, Jaipur,
Allahabad, J&K, Bhopal, Nagpur, Calicut, Kurukshetra, Surathkal, Raipur).
These will be continued as implementing agencies and more implementing agencies such as
Indian Institute of Technology (IIT), National Institute of Technology (NIT), Reputed
Industrial Design Institutes, Tool Rooms etc., may be included.
IAs will be paid 15% as implementation charges on the GoI grant released under Design/
Students Projects.
Under phase two, the following will be provided:
1. MoMSME Chair in all the IAs who will entrusted with the responsibility of promoting
research and innovations in Design in MSMEs through studies, fellowships,
scholarships, product-specific problem solving and the like.
2. Developing a dedicated Centre of Excellence (MoMSME-CoE) to facilitate research,
ideation, technological upgradation, develop futuristic technologies, provide customised
solutions, become a depository of MSME documentation, restoration of ancient domestic
technology, develop sandboxes/simulators for testing products etc for the MSME sector.

Roles & Responsibilities of Implementing Agency (IA):

 IA will function as a link between the MSMEs and the Government (office of the DC
(MSME). It would also act as a single point of contact for the office of the DC (MSME).
 IAs will help the MSMEs in identifying their Design Problems in their products & will
provide expert advice &cost-effective solutions for the same.
 IA will constitute a Project Assessment Panel (PAP) for scrutinizing/ evaluating the
proposals received. IA should ensure that MSME is willing to pay its matching fund and
it should be verifiable.
 IA will ensure that the Project is completed within the time frame of the scheme
guidelines. Upon the completion of the project, IA will submit a completion report and
will demonstrate the prototype product before the PMAC.
 IA shall not divert any part of the grant to any activity other than for which it has been
sanctioned.
 IA would be responsible for maintaining a separate ledger account of funds of the
scheme. This account shall be opened for inspection by the C&AG of India, internal audit
by PAO of Ministry of MSME or any officer appointed by the office of DC (MSME) for
this purpose.
 IA would release the funds directly to the beneficiaries / Industrial designers against the
reports on the basis of progress of implementation of the scheme and on the satisfactory
performance of the respective Industrial Designers. It will also submit necessary
utilization certificate (UC) in existing prescribed format (as per GFR) along with audited
statement of expenditure and detailed report to the office of DC (MSME).
 IA would submit quarterly reports to the apex body on overall progress of the scheme. It
would also raise exception reports, if any, as regards to any nonresponsive behaviour or
non-satisfactory performance of any of the beneficiaries and the designers.
 IA will ensure that no similar benefits have been availed from any Govt./ State Govt.
Sponsored schemes or other public funding sources for the Design Project. An
undertaking on notary stamp paper is to be given that similar benefits have not been
availed from any other Government sponsored schemes or other public funding source.

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 13

 If the IA/MSMEs could not utilize the fund of Grant-in-aid amount within the stipulated
period, the same Grant-in-aid amount shall be refunded in the Government account as per
Government Rules /Sanction order.
 IA would ensure that while utilising the GoI financial assistance, no liability will be
created for the Government of India.

4.3. INTELLECTUAL PROPERTY RIGHT (IPR) COMPONENT:

This component offers legal and intellectual property filing support including patents,
trademarks, copyrights, designs, geographical indications (GI) etc. The programme also
provides IP advisory, consultation, Patentability Searches, Technology Gap Analyses and IP
commercialisation through establishment of Intellectual Property Facilitation Centres (IPFCs)
across the country.
Intellectual Property Facilitation Centre (IPFC)

Eligibility for registration as IPFC

Eligible Agencies:
 MSME-Development Institutes, Technology Centres and any other associated Field
Organisations directly or indirectly under the administrative control of Ministry of
MSME.
 The existing IPFCs will continue for implementation of the scheme till their remaining
period and the financial assistance will be applicable as per the new guidelines. After
completion of their project period, they will need to reapply.
 Government Bodies/Departments /Autonomous Organisations being Run on Autonomous
or Commercial Lines, MSME Industry Associations, Societies/ Cooperatives /
Firms/Trust and Other profit and non-profit Bodies, NGOs representing or working for
MSMEs, Research/ Technical & Educational Institutions, Universities/ colleges with a
track record of assisting MSMEs etc, subject to the following:
• They must have an established project execution infrastructure, built-up space
including human resources (IP experts, business development, finance/accounting and
admin staff), capital infrastructure like computing devices, printers, office with
furniture; and
• They must have demonstrated suitable work experience in matters related to
Intellectual property through pilot studies, research studies, knowledge dissemination
activities, in-house IP advisory resources, Technology transfer and IP supports etc.
• The agency should in operation for at least 02 years on the date of application.
• In case of non-government entity, the agency must present audited annual reports for
last 2 years.
• They should not have taken any other grant for the same project from any Central
Ministry/State Government.

Duration: The IPFC would be recognised as IA for a period three years, initially, which can
be renewed based on the IPFC’s performance after approval of PMAC.

Stakeholders & Their Expected Role:

a) Ministry of MSME - PMAC

1. At the highest level, PMAC will guide, review, monitor and provide overall direction
for implementation of the scheme

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 14

 2. It will have an overall responsibility for policy formulation, Scheme implementation,
proposal approvals and project monitoring
3. It will be empowered to take all key decisions related to the scheme, proposals or
recommendations to approve minor modifications/procedural changes in the guidelines
for operational expediency etc.
4. Select and empanel active IPFCs as implementing agencies to execute, launch, and
implement various schemes of the MoMSME.
b) MSME DIs
1. The DI office will assist, guide and monitor the functioning of IPFCs and act as the
connecting link between the MoMSME and the IPFCs.
2. It will assess the application for empanelment of agencies as IPFCs and forward the
proposals along with its recommendation, for consideration of PMAC.
3. It will route the issues, feedback and requests made by IPFCs to the PMAC for
redressal and suitable action. It will also submit Monthly Progress Report of IPFC
activities along with its feedbacks to MoMSME.
4. It will provide MSME beneficiaries with IPFC information such as the IPFC working
domain, location, entity type, core strengths, service portfolio and progress overview to
assist the beneficiary in approaching suitable IPFC for their specific requirements.
5. It will conduct awareness programmes/seminars/workshops/webinars as per the target
detailed out by MoMSME.
c) IPFC
1. IPFCs shall recruit IP experts, consultants, business development and marketing
officers, finance/accounting, admin staff to ensure effective project operations and
efficient delivery of IPFC services to the beneficiaries
2. IPFCs shall provide IP filing services (such as filing of patents, trademarks, designs,
copyrights)
3. IPFCs shall provide other IP support such as IP advisory & Consultancy, IP Searches,
Prior art Searches, Novelty Search, Validity Search, Freedom to Operate ( FTO)
analysis, Drafting & Filing of application, support for enforcement of IPR,
Infringement, Opposition suits , prosecution Valuation of IP assets, IP Monetisation, IP
due diligence & risk analysis, IP audits, Tech transfer and knowledge dissemination to
MSME beneficiaries etc, to encourage more MSME beneficiaries to invest in efficient
R&D that is strong in terms of Intellectual property
4. IPFCs shall facilitate and process the reimbursement applications for granted patents,
trademarks, designs and geographical indications filed by eligible applicants through
detailed validation of the submitted applications and supporting documents.
5. IPFCs shall reach out to MSME DI to flag issues, discrepancies or any other concerns
or assistance pertaining to the project execution.
6. IPFCs shall submit monthly progress report of the activities to DI for compilations and
onward submission to MoMSME.
7. IPFC will submit proof of achievement (Utilisation Certificate, audited statement of
expenditure, detailed progress reports etc) for grant of financial assistance from the
MoMSME.
8. IPFCs are expected to work in close association with the National Patent
Offices/Regional Patent Offices and other National/International Agencies
administering the implementation of IPR related matters.

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 15

 9. While setting up of these centres, no liability will be created for the Government of
India.
10. Each IPFC has to form a steering committee chaired by the Director, MSME-
Development Institute and other stake holders, experts from the industry its members.
Meeting of the steering committee should be organised in every three months and
performance of IPFC should be evaluated by respective MSME-DI.
Financial Assistance for IPFC:
1. PMAC shall evaluate IPFCs for financial assistance. A Grant of up to Rs. 1 crore would
be provided to an IPFC in milestone-based three (or) more instalments. The exact
quantum of grant and instalments for each IPFC will be decided by the PMAC based on
evaluation of proposals.
2. The quantum of first instalment may be up to 40% of total approved project cost or as
requested by IPFC whichever is less. The IPFC may request for the next instalment,
which shall be released subject to submission of proof of achievement of milestones.
3. Upon suitable utilisation of the grant on/before three years, the IPFC can approach for
further funding beyond the total project cost of Rs. 1 crore, subject to approval of PMAC.
4. The renewal of the accreditation of the IPFC will be done at the end of 3 years of its
approval, subject to its satisfactory performance and approval by the PMAC. Further
funding will be subject to renewal of accreditation of the IPFC.
5. The first instalment grant should be utilized fully by the IPFC within a period of three
years from the date of receipt of the first instalment of funds, otherwise the IPFC will not
be considered for renewal of registration. It will return all unutilized funds along with
interest.
6. The IPFC has to ensure free professional services to MSMEs from pre-filing services to
IP commercialisation and not only to support to set up Innovation based enterprises but
also strengthening their IP portfolio across the world to make them MSME Champions.
7. The administrative/implementation expenditure on the overheads, consumables,
contingency and other such heads, shall not exceed 15% of the individual instalments.
While setting up of these centres, no liability will be created for the Government of India.

These expenditure subheads are detailed as follows:

 Administrative/Implementation Expenditure Heads:
• Stationery, Telephone bills, Internet charges, Printer cartridges & toners, printing
materials, travel for meetings with stakeholders in the MSME ecosystem
including innovators, government officials, subject experts, institutions and any
other applicable expenditures pertaining to IP facilitation.
• IPFC will be liable to claim 2% implementation charges for handling IPR
reimbursement, within the upper limit of 15%.
8. Hiring of professional services (IP expert, IP Attorney/Agent) as per requirement will be
covered in the project cost.
9. The above expenditure details must be indicated at the project approval stage which will
be approved by the PMAC.
Eligibility for Reimbursement of Patent/ Geographical Indications/ Trademarks/ Design
A) For Patent, Trademark and Design Reimbursement:
 The applicant/entity/unit must have a valid Udyam Registration.
 Patents/Trademarks/Designs registered in the name of individuals are also eligible for
reimbursement subject to holding a Udyam Registration in their name and have full

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 16

 ownership of the enterprise. In case of partnership firm, applicant has to provide proof
of ownership of at least 51% shareholding in the enterprise.
 Applicant has to submit a self-declaration for not claiming funding from any
Central/State Government for the same patent/trademark/design.
B) For Geographical Indication Reimbursement:
All agencies, institutions, associations, institutes, non-profit bodies, NGOs, societies,
trust, or similar other non-commercial bodies having valid incorporation/establishment
documents, PAN number etc.

Financial Assistance for MSMEs:

Reimbursement for registration of Patent, Trademark, Geographical Indications (G.I.),
Design:
 The applicant shall file the reimbursement application through the portal of the scheme.
The same will be duly forwarded after comprehensive scrutiny by the IPFC to MoMSME
for requisite approval. Upon approval of the application by MoMSME, the
reimbursement will be done by the IPFC.
 The maximum financial assistance to the eligible applicants under the IPR component is
as follows:

S. No. Item Maximum Financial Assistance

1. Foreign Patent Rs. 5.00 lakh
2. Domestic Patent Rs. 1.00 lakh
3. GI Registration Rs. 2.00 lakh
4. Design Registration Rs. 0.15 lakh
5. Trademark Rs. 0.10 lakh
 The financial assistance under the scheme for the reimbursement of expenditure incurred
towards registration of patents/trademarks/Designs/GIs, will be a onetime support from
GoI subject to condition that same has not been claimed by the applicant under any other
scheme of Central Govt./ State Govt.
 Patent: The applicant may receive 100% reimbursement of the actual costs or expenses
incurred towards the Patent registration with competent authority [including but not
limited to facilitation fees, all government fees, design/ diagram and drawing fees,
attorney fees, consultancy charges, prior art search and analysis charges, patent
application drafting (provisional and complete specifications) charges, charges for patent
application prosecution and hearings, examination and publication fees, fee and charges
associated with PCT/international/foreign patent fillings, other incidental charges]. This
should be duly supported by original invoices/bills/receipts with a maximum upper limit
of Rs. 1 lakh for an Indian patent and up to Rs 5 lakh for a foreign patent. However, it
will not cover the cost incurred on renewal of applications or any other expenditure
incurred towards assignment of IP, correction in application etc.
 Trademark: The applicant may receive 100% reimbursement of the actual costs or
expenses incurred towards registration of a trademark with competent authority
(including but not limited to facilitation fees, all Government Fees, Attorney Fees,
consultancy charges, Search Fees, application drafting charges, charges for TM
application prosecution and hearing, Examination fees, fee and charges associated with
international/foreign TM fillings, other incidental charges etc.) duly supported by original
invoice/bills/receipts with a maximum upper limit of Rs. 10,000/- for each registered
trademark irrespective of classes.
 Design: The applicant may receive 100% reimbursement of the actual costs or expenses
incurred towards registration of a design with competent authority (including but not

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 17

 limited to facilitation fees, all Government Fees, Attorney Fees, consultancy charges,
Search Fees, application drafting charges, charges for design application prosecution and
hearing, Examination fees, fee and charges associated with international/foreign design
application fillings, other incidental charges etc.) duly supported by original
invoice/bills/receipts with a maximum upper limit of Rs. 15,000/- for each registered
design irrespective of classes.
 Geographical Indication (GI): The applicant may receive 100% Reimbursement of the
actual costs or expenses incurred towards registering the a GI with competent authority
(including but not limited to facilitation fees, Attorney Fees, Maintenance Fees, all
Government Fees, consultancy charges, application drafting charges, charges for GI
application prosecution, hearing and meeting with GI registry/consultative group,
expenditures incurred on information collection, GI logo charges, design/ diagram and
drawing charges, scientific/lab testing, other incidental charges etc.) with a maximum
upper limit of Rs. 2 lakhs for each registered GI.
 There can be any number of applications may be submitted by the MSME unit for
reimbursement; however, the amount will be restricted to the ceilings as per table cited
above for per IP registration.
 Reimbursement will be made to eligible MSME enterprise subject to receipt of copy of
MSME Udyam Registration certificate, copy of patent/trademark/Design/GI registration
certificate, copy of bank mandate form & Bills/Vouchers in original.

5. COMPONENTS APPLICABLE TO ALL SUB-SCHEMES

Apex Body (Project Monitoring and Advisory Committee, PMAC)
• An apex body Project Monitoring and Advisory Committee (PMAC) will be formed with
AS & DC (MSME) as Chairperson. In addition, experts will be drawn from areas
including academia, VCs, financial institution, management, administration, concerned
government departments, etc. The apex body will comprise of persons who are not likely
to be the beneficiaries of this program.
The constitution of PMAC will be as follows:
S. No Details of PMAC Composition Designation
1. AS & DC (MSME) Chairman
2. Joint Secretary, MoMSME Vice Chairman
3. Economic Adviser, MoMSME Member
4. Representative from concerned Ministries/ Member
Departments
5. ADC/DDG/JDC in-charge of MSME-DIs/TCs Member
at O/o DC (MSME)/Representative
6. Special invitees/experts/consultant/ Member
Implementing Agencies
7. Representative of PMU Member
8. Representative of Industry Associations Member
9. Director/Nodal officer handling scheme in Member Secretary
MoMSME
• At the highest level, PMAC will guide, review, monitor and provide overall direction for
implementation of the scheme. PMAC will have overall responsibility for policy
formulation, scheme implementation and monitoring. It 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.

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 18

5.1. Awareness & Training Activities:
Awareness Activities:
The activities in this component will leverage the already existing partnerships of the
Ministry of MSME with other public/private organisations and also explore to forge new
partnerships so as to enable a more conducive framework for MSME Innovative Scheme with
respect to its three components viz. Incubation, Design and IPR.
5.1.1. Industry Awareness Programmes: MSMEs will be made aware of the MSME
Innovative through nation-wide awareness programmes (online and/or face-to-face, as
appropriate) with the assistance of stakeholders like Industry Associations,
Implementing Agencies, MSME-DIs, District Industries Centres (DICs).
5.1.2. Training Programmes: Training of officials of MoMSME, O/o DC (MSME),
MSME-DIs, MSME-Testing Centres, Technology Centres, Design Incubation
Centres, IPFC, etc. on the MSME Innovative to enable an effective implementation.
5.1.3. Regional/State/National Workshops: These workshops will be conducted for all
stakeholders including the state industry department & MSMEs. They will be
organised by Implementing Agencies. During the workshop promotion of scheme,
discussions on outcomes of schemes, success stories, discussions on issues related
with implementation of schemes, views of stakeholders, latest global developments,
experience sharing, adoption of best practices etc. pertaining to the scheme will be
discussed.
The financial assistances for the activities to be organised by IAs/organisations under
administrative control of MoMSME/DC-MSME, in the sub-schemes, are as follows:
S. Type of Programme Deliverables Amount limit
No
1. Awareness Programmes One day programme. Webinar: Rs. 40,000/-
(Minimum 30 Physical: Rs. 70,000/-
participants.)
2. Training of officials of 5-Day training programme Virtual: Rs. 60,000/- per
MoMSME, DC-MSME, MSME- ~20-25 participants per day
DIs, MSME-Testing Centres, training Physical: Rs. 3 Lakh per
Technology Centres, Design day (May be prorated)
Incubation Centres, IPFC, etc.
3. Regional/ State/ National Multi-day Workshops Physical: Rs. 5 Lakh per
Workshop by Implementing (Maximum 5 Days) day (May be prorated)
Agencies (Minimum 50
participants.)
Foreign Travels, International Trainings, International Benchmarking, Exposure Visits
and Study Tours for learning Best Practices relating to MSME Innovative Scheme
Adoption of world class practices for MSME Innovative Scheme is a must for the envisaged
interventions. The objective of this activity is to develop a framework for best Innovation
practices through international cooperation in the field of capacity building activities, study
tours, international trainings/seminars/workshops/exhibitions, experience sharing, providing
suitable linkages and cooperation with foreign countries and other international agencies.
To facilitate learning of relevant world class practices, proposal(s) relating to the activity will
be prepared by IAs, which will be considered on case-to-case basis on its merit. Additionally,
MoMSME may also enter into collaborations/partnerships with international agencies/foreign
governments to explore the possibility of capacity building and experience sharing in the
fields covered under the scheme. The delegation will submit a report regarding the findings
of the visit which is to be shared with stakeholders. The PMAC may decide the finer details
and financial implications.

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 19

5.2. Financial Assistance for SEED Capital support for Incubation/Design Schemes:
Seed Capital support fund for supporting MSMEs in setting up of business: Financial
assistance of up to Rs.1.00 cr. as Equity for the Seed Capital Support shall be provided to
encourage MSME/others to stimulate the commercialization of their Ideas/Designs/Patents
and facilitate preparation for pre-investment series funding. This would foster the
development of innovative and technology-based business enterprise leading to employment
generation and economic development of the country. This would be a unique facility for
venture debt funding for nurturing incubation/design ventures.
The funds shall be managed by SIDBI with management fee @ 5%. A separate Corpus will
be created and managed by SIDBI for providing equity in ratio of up to 80:20, where a
maximum of 80% funding will be provided by the GoI through corpus created and managed
by SIDBI. This corpus would be created through the financial assistance of MoMSME and
the remaining funding will be contributed by the beneficiary MSME.
The approval of proposal for seed capital support will be done by PMAC on recommendation
of a Domain Expert Selection Committee (DESC), specifically set up for the purpose.
The seed support would generally cater to early-stage financing for commercialization of the
indigenous ideas, innovations and technologies. The Seed Capital fund will support, inter-
alia, the following activities:
 Developing backward and forward linkages
 Market entry
 Commercialization
 Scaling up through convertible debentures or debt or debt-linked instruments
 Enabling funding from High Net-worth Individuals/Venture Capital Funds/Angel
Investors/ Private Equity
Eligibility criteria for availing Seed Capital:
All the MSMEs/others who will be the Grantees of the Seed Capital Support must be existing
beneficiaries under the MSME Innovative Scheme for Incubation/Design/IPR (Patents)
Schemes, which is as follows:
a. whose idea has been approved and supported under the Incubation Scheme
b. whose design projects have been approved under the Design Scheme
c. whose patents (domestic/international) have been granted and have already applied
for/got reimbursement under the IPR scheme.
Definition of MSMEs:
1. All MSMEs registered with the UDYAM registration portal (of the MoMSME) will
be eligible
2. However, those MSMEs registered under UAM (Udyog Aadhaar Memorandum)
which has been obtained till 30.06.2020 will also be eligible to participate till
31.12.2021, or till the revised deadline (whichever is later), after which they would
need to migrate to UDYAM.
The following pre-conditions may be ensured for being eligible for SEED Capital Funding:
 Preference would be given to beneficiary creating innovative solutions in sectors such as
social impact, environment management, Green/Clean Energy initiatives, waste
management, water management, financial inclusion, education, agriculture, food
processing, biotechnology, healthcare, mobility, defence, space, railways, oil and gas,
textiles, etc.
 Beneficiary will not receive seed support more than once or must not have received
similar such support from any other GoI/State Government schemes.
 Any additional criteria as may be decided by the PMAC.

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 20

Mechanism of Selection, Disbursement, Governance and Fund Management of SEED
Capital Support
For selection of beneficiaries for the SEED Capital Support fund, a Domain Expert Selection
Committee (DESC) comprising of various Government officials, Experts and the Industry
will be formed.
The proposed composition is as follows:
➢ Joint Secretary, AFI, MoMSME, Chairman
➢ Economic Adviser, MoMSME
➢ Representative of CMD SIDBI
➢ Representative of IAs of MSME Innovative Scheme
➢ Any other member as decided by the Chairman, DESC
➢ Director(T&P), MoMSME as Member Secretary of the Committee
Seed Capital Support Disbursement Mechanism

1. Application and Selection Procedure

♦ All existing beneficiaries under the MSME Innovative Scheme for
Incubation/Design/IPR (Patents) Schemes and are willing to apply for Seed Capital
Support can apply through a designated portal.
♦ Presentation of the Seed Support requirement to the Domain Expert Selection
Committee (DESC)
♦ DESC will shortlist the proposals put forth beneficiaries which demonstrate scalability,
commercial viability, financial sustainability etc for Seed Capital Support. DESC
would recommend and forward the same to SIDBI for due financial diligence.
♦ Final proposals would be forwarded to PMAC for its approval which will give the
SEED Capital Support sanction orders to SIDBI for funding.
2. Roles and responsibilities of SIDBI:
➢ SIDBI will design a suitable financial product specific to the SEED Capital component
of the scheme. It must be unique in its design in terms of credit variables.
➢ SIDBI would execute a legal agreement with the beneficiary who is selected for the
seed capital support and this agreement should be signed before the release of the first
instalment of seed fund.

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 21

 ➢ Subsequent disbursement schedules should be linked to the achievement of mutually
agreed milestones between SIDBI and Beneficiary. SIDBI should ensure that the
necessary terms and conditions related to the Seed Support, repayment schedule,
equity and Exit Clause SOP are clearly spelt in the agreement. Terms regarding default
in repayment shall also be defined clearly in the agreement.
➢ SIDBI would have flexibility in disbursement of Seed Support to the beneficiaries as
defined in the agreement. Detailed clauses on seed fund recovery may be developed by
SIDBI and got approved by PMAC.
➢ SIDBI will take the responsibility in respect to, any and all losses, expenses, costs,
obligations, liabilities and damages, including interest, penalties, legal consequences
and attorney’s fees and expenses which the beneficiary may incur as a result of any
negligent or wilful acts or omissions of the beneficiary. This shall be limited to the
SEED Capital being provided under the scheme.
➢ SIDBI shall report the business performance for each beneficiary. Appropriate matrix
may be devised for this purpose.
➢ SIDBI would also submit detailed performance report of the Seed Capital fund
disbursed with performance of the individual units for perusal of PMAC. PMAC
reserves the decisions for fresh releases, exits and otherwise.
Indicators of Successful Implementation
The following shall be tracked and recorded by SIDBI for all the beneficiaries:
i. Progress of product development
ii. Progress of field trials
iii. Progress of market launch
iv. Quantum of loan, angel or VC funding raised
v. Employment generated by the beneficiary
vi. Business growth of the beneficiary
vii. Any other appropriate parameter

Seed Capital Fund features:

➢ SIDBI shall maintain a dedicated, scheme-specific corpus for Seed Capital Support.
Funds under this scheme shall be released into that account by MoMSME first as an
advance (as per agreement) and subsequently disbursed after reviewing the progress of
the implementation of the programme after approval by PMAC.
➢ Any interest earnings from the float will be recycled into the corpus.
➢ All loan repayments and debt servicing received from beneficiary will be recycled into
the corpus.
➢ Each beneficiary shall report the funds sanctioned, received, and utilised to SIDBI on
half-yearly basis. The beneficiary would also submit detailed report on status of
utilization of funds and audited expenditure for each financial year.
➢ The review of the fund performance would be carried out by PMAC periodically. The
decision with regards to continuation or closure of the corpus will be taken by the
PMAC. In the event of closure, the corpus money must be returned to the MoMSME.
5.3. Digital Platform
The scheme would be operated end to end through online means from the registration process
to the assessments, financing and monitoring through a newly developed portal the portal,
which will act as a single window system, will be interoperable with a robust MIS.
5.4 Publicity & Promotion: An integrated outreach and management programme across all
platforms – Electronic, Print and Digital media. It will now be open to multiple agencies such

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 22

as State Governments, DAVP, PIB and the private sector. There will also be webinars, films,
newspaper advertisements etc. through the year to promote the scheme.

6. COMMON STAKEHOLDERS & THEIR EXPECTED ROLE

a) Ministry of MSME
The Ministry of MSME shall create an enabling environment and assist its partners in
achieving the above-mentioned objectives by:
1. Providing the approved guidelines for the development of various strategies and
frameworks.
2. Monitoring and evaluation of MSME Innovative Champions implementation.
3. Creating a PMU for smooth operations and coordination.
4. Identifying and partnering with Implementing Agencies for implementation of MSME
Innovative Champions.
5. Co-ordinating including obtaining relevant consents/approvals to various
Ministries/Departments/States and other stakeholders regarding the MSME
Innovative Champions.
6. Ensuring nation-wide Media/PR activities for wide publicity of the MSME Innovative
Champions.
7. Instituting incentives for MSME Innovative Champions.
b) MSME-Development Institutes
MSME-DIs will enable effective implementation of the MSME Innovative by:
1. Creating a mechanism for widespread dissemination of information on this initiative
through its offices and assisting maximizing awareness & outreach of the MSME
Innovative Guidelines to enrol MSMEs on the MSME Innovative.
2. Assist the Ministry in capacity building of the industry.
3. Explore extending graded benefits to MSMEs which obtain a MSME Innovative
4. MSME DIs will not be eligible for Grant in Aid as per GFR. Any financial assistance
to MSME DIs would be through budgetary support through suitable budget head.

c) Implementing Agencies
Ministry of MSME will identify and partner with Implementing Agencies like IISc/IIT/NIT,
HIs, IPFCs who will:
1. Develop a mechanism of dissemination of these guidelines in a manner that the
MSMEs understand them well and adopt them to improve their systems and
processes.
2. Develop a mechanism to assess the level of on-ground adoption of these guidelines.
3. Assist in providing handholding to deserving MSMEs to help them achieve a higher
MSME Innovative Champions.
4. Any other task as advised by the Ministry.
d) Micro, Small & Medium Enterprises
1. Undergo Awareness Programmes & Training for a better understanding of the MSME
Innovative Champions guidelines.
2. Exhibit intent and commitment towards improving their systems and processes so as
to achieve higher MSME Innovative Champions.
e) Other Ministries & Departments
1. Explore benefits/incentives relevant to their respective Ministry/Department for
MSMEs who obtain MSME Innovative Champions.
2. Explore extending preference to promote MSME Innovative Champions.

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 23

7. INTEROPERABILITY ARRANGEMENTS
7.1 The MSME Innovative scheme is designed by integrating three components of CLCS-
TUS (viz., Incubation, Design & IPR) schemes to create CHAMPIONS, where each
component can have interoperability with other components during the phases of
intervention to enhance capacities/capabilities of champion MSMEs. MSME can have
opportunity to suitably interlink benefits among three components during the
period/stage of implementation.

7.2 There are some options of various combinations like

a. Only Incubation OR Only Design OR Only IPR
b. Incubation-Design-IPR
c. Incubation-Design
d. Incubation to IPR
e. Design-IPR

MSME can apply for any one of the above combinations. The financial assistance will be
applicable for availing the benefits as per the individual scheme component.

7.3 One scheme may enter from one completed gate to the gate of another scheme as per the
requirement of the MSME, while ensuring that the original scheme it enrolled for is
taken to the natural conclusion. At the time of applying for the next scheme, the
applicant should adhere to the respective scheme guidelines for that particular scheme.

INCUBATION

DESIGN

MSME /
INDIVIDUAL IPR

INCUBATION DESIGN IPR

INCUBATION IPR

DESIGN IPR

*****

Guidelines is available at [Link] & [Link]

GUIDELINES/ MSME INNOVATIVE/ 2021-2022 24