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It is no secret that the Government of India has from time to time been introducing new policies and financial aid schemes for economic and business growth, especially for the Micro, Small, and Medium Enterprises (MSME) in India. The ASPIRE scheme is one such scheme that was launched with the objective to set up technology and incubation centres to drive entrepreneurship and cultivate a culture among start-ups of innovation in agriculture.
The ASPIRE scheme and MSME Innovative scheme are two such schemes launched by the government that focuses on building/identifying business incubation centres and promoting innovation among emerging and MSME businesses.
ASPIRE scheme full form:
A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE)
– An initiative from the Ministry of Micro, Small & Medium Enterprises (Government of India)
What is the ASPIRE scheme?
Before we look into the meaning and objectives of the ASPIRE scheme and how it aims to benefit MSMEs in agriculture, let us look at some key highlights of the Indian agricultural industry.
Agriculture has been a pillar of the Indian economy and contributes to about 58% of the country’s livelihood (Source: IBEF, Dec 2022). It creates employment for about half of the population making farmers and farming integral to sustenance. The growth in the country’s population has accelerated the demand for foodgrains and farm produce, with the industry predicted to touch USD 24 billion by 2025 (Source: Inc42).
Not surprisingly, the government has regularly been launching new schemes for promoting ease of agriculture. ASPIRE scheme launched in 2015 is one such initiative that aims to promote entrepreneurship, employment generation, and technology innovation in the agricultural sector.
Like the many hurdles MSMEs face in business, entrepreneurship too has its own challenges – especially with respect to knowledge and awareness of doing business (i.e., regulations, legal, taxation, compliances, procedures).
With the ASPIRE scheme for MSMEs, the goal is to provide necessary knowledge and skill-based training for entrepreneurship in the agro-sector among the Indian start-up system. Not only would it encourage innovation and the setup of new enterprises but create employment and sustainable businesses across agriculture and related sectors including manufacturing, food-processing, and services.
ASPIRE scheme objectives
The ASPIRE scheme, promoted by the ministry of MSME, was set up with the goal to promote innovation in agriculture and help to promote economic development in rural sectors. Among other benefits, it also provides financial support for the establishment of Livelihood Business Incubators (LBI) and Technology Business Incubators (TBI). The efforts are all aimed at creating more job opportunities, innovation and entrepreneurship in agriculture and related fields. The initial fund for the scheme was ₹200 crore.
Some of the main objectives of the ASPIRE scheme are:
- Create new jobs in India and reduce the rate of unemployment
- Cultivate a culture of innovation and entrepreneurship in India (especially by start-ups)
- Develop economic development activities in districts at the grassroot level
- Promote innovative business ideas and solutions to meet social needs of people
- Work towards strengthening the competitiveness of the MSME sector through innovation
For more information on the scheme, please visit: aspire.msme.gov.in
Who is eligible to apply to the ASPIRE scheme?
The ASPIRE scheme eligibility for funding, extends to the following entities/institutions:
- Any individual who wants to begin a start-up as an entrepreneur (must be above 18 years)
- Any university, technical institute, or research centre especially those focused on the rural and agricultural sectors (agro-industries)
- Any MSME with EMR (Note: As of 2020, Udyam MSME registration is the only registration MSMEs need)
- Any government (central and state) led institute/agency in the line of technology, entrepreneurship and rural development, and business management
- Any existing incubation centre under government departments and/or ministries and institutions under central/state governments especially in the agro-based industry
- Any new incubation centre being set up by eligible private entities
How to apply to the ASPIRE scheme?
For availing benefits under the ASPIRE scheme, apply to the Aspire Scheme Steering Committee (of the Ministry of MSME). The committee is responsible for the overall policy, coordination, and management support.
To learn more about eligibility and application, visit the ASPIRE official site at: https://aspire.msme.gov.in/ASPIRE/AFHome.aspx
What are the benefits of the ASPIRE scheme?
In its initial fiscal year of 2014-15, a budget of ₹200 crores was allotted to the ASPIRE scheme. The scheme aims at providing training to develop entrepreneurial skills, provide guidance for a specific time frame to cultivate self-sustainability, and build market linkages for growth.
Some of the benefits that entrepreneurs, start-up businesses, and MSMEs under the ASPIRE scheme can enjoy are:
- Automation of agricultural techniques and operations for efficiency
- Recycling of agricultural harvest waste and animal husbandry (related to farm and off farm)
- Aggregation of rural-based business models
- Value addition to forest products and agriculture
- Business models that have a positive social impact and create local employment in the rural sector
Components of the ASPIRE scheme
The scope of the scheme grew over the years, with the Budget of 2019 proposing the establishment of 80 LBIs (total budget allotted is ₹62.5 crore) and 20 TBIs (total budget allotted is ₹61.5 crore).
Livelihood Business Incubators (LBI):
The goal of setting up LBIs is to empower people to take up entrepreneurship and provide employment in the rural areas through sustainable businesses and business models. These LBIs can support with required skill development trainings and funding required.
- LBIs can be set up within the National Small Industries Corporation (NSIC), Khadi and Village Industries Commission (KVIC) or Coir Board, or any other institution or agency of the central or state government
- A provision for grant of up to ₹100 lakh or 100% cost of plant and machinery (excluding land and infrastructure) is also available – whichever is lesser
- Agencies under the PPP model can also set up LBIs
- Similarly, a grant of ₹50 lakh or 50% cost of plant and machinery (excluding land and infrastructure) is available – whichever is lesser
Technology Business Incubators (TBI):
TBI facilities are aimed at enabling small businesses grow by smart technology adoption and innovation. This will not only promote economic growth locally but also cultivate ideation among the youth. The goal is to provide support for technology adoption and commercialisation, provide value-added support in finance, legal, and build incubation centres.
- Technology Business Incubator will aim to support existing centre or state managed incubators for agro-based industries and establish new incubators
- A grant of ₹30 lakh or 50% of cost of plant and machinery (excluding land and infrastructure) is available for existing incubators – or whichever is lesser
- A funding of up to ₹100 lakh or 50% of the cost of plant and machinery (excluding land and infrastructure) is available for setting up new centres – or whichever is lesser
SIDBI funding initiatives:
A funding of ₹60 crore via SIDBI is proposed to help with converting ideas with potential into commercial enterprises. The goal is to provide knowledge to help build technology. In tune with the purpose of ASPIRE, focus areas include innovation, entrepreneurship, accelerator support in agro-business, and the value-chain of related businesses.
Summing up: MSMEs in India and government aid
There can be little debate on the potential of the MSME sector and the value it adds to the Indian economy. With the pandemic and subsequent lockdowns affecting MSMEs across the country, the government revised the definition of MSMEs to include wholesale traders and retailers and extend specific MSME benefits to them. Similarly, there was a host of other schemes introduced to support MSMEs with marketing, business expansion, funding, technology development, and growth.
Schemes like ASPIRE, though launched earlier, aims to make it possible for individuals to get the right support for starting a business, innovate, and grow. It provides training, assistance, funding and the right opportunities.