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Launched on March 10, 2022, the MSME Innovative scheme or the MSME Innovation scheme is a component of MSME Champions scheme, a program to help small businesses facing problems with finance, raw materials, labour, permissions, etc. The Innovative scheme combines three sub schemes of the Champion scheme namely, Incubation, Design and IPR schemes launched by the Ministry of MSME.

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The MSME sector forms the backbone of India’s economic development and the government has from time to time introduced new schemes and policies to support their growth (e.g., MSME Samadhaan scheme to help MSMEs with delayed payments). MSME Innovation scheme is another such scheme designed to support and drive their growth.

Let us understand the meaning of the Innovative scheme in detail, how to apply, who is eligible, the objective of the scheme and more.

What is MSME Innovative scheme?

As the name suggests, the scheme seeks to increase innovation among MSMEs by providing them with the right financial and other resources. The MSME Ministry has combined the design, incubation and IPR elements of the Champions scheme to promote innovation among small businesses.

While the design and the IPR component helps MSMEs, the incubation component is to recognise eligible institutions as Host Institute (HI) to act as business incubators. These institutions will be responsible for inviting ideas from MSMEs and approving these ideas with the help of the MSME ministry.

Objectives of the MSME Innovative scheme

These are the main objectives of the MSME Innovation scheme 2022:

  • To promote all forms of innovation from developing ideas to building innovative applications through incubation and design interventions.
  • To provide appropriate facilities and support concept development, design competitiveness and protection & commercialization of intellectual creations of the MSME sector.
  • To focus on developing affordable innovations that can benefit a large number of people and at the same time being commercially viable and sustainable.

The MSME Innovation scheme and ASPIRE scheme for MSMEs are two popular schemes launched by the government to promote sector-wide innovation.

The design component of MSME Innovative scheme

The Design scheme is divided in two major parts:

  • Design project: To help MSMEs develop new design strategies and design related products through interventions and consultancy.
  • Design awareness programme: To create general awareness about the value and power of design for businesses through seminars, talks, workshops, etc.

The financial assistance of the design scheme is 75% of the total project cost for micro enterprises and 60% of the total project cost for small and medium enterprises.  The maximum financial grant provided will be ₹40 lakh.

The total project cost will be provided as grant in 3 stages:

  • Stage 1 – Strategy and concept- 40%
  • Stage 2 – Detail design – 30%
  • Stage 3 – Successful completion of the prototype/product and final report submission – 30%

Who is eligible for MSME Innovative scheme – Design scheme?

This is the eligibility criteria to apply for the design scheme:

  • MSMEs with a valid UAM or Udyam registration
  • Preference to profitable entities in the at least one year out of last three financial years
  • The designer that a unit employs in this scheme should be qualified Industrial designers having relevant experience in that field

The IPR component of MSME Innovative scheme

The incubation scheme seeks to provide reimbursement for registration of patent, trademark, Geographical Indications (G.I.) and design. The financial assistance for MSMES under this scheme are as follows:

  • Foreign patent – ₹5 lakh
  • Domestic patent – ₹1 lakh
  • GI registration – ₹2 lakh
  • Design registration – ₹15000
  • Trademark – ₹10000

Who is eligible for MSME Innovative scheme – IPR scheme?

This is the eligibility criteria to apply for the IPR scheme:

  • MSMEs with a valid Udyam registration
  • Applicant must submit a self-declaration for not claiming funding from any Central/State Government for the same patent/trademark/design
  • For GI 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.

How to apply for MSME Innovation scheme?

All MSMEs can submit proposals/applications on the Innovative portal (https://innovative.msme.gov.in) under the respective scheme component of MSME Innovative scheme. Upon receipt of the application, the Implementing Authority (IA) will conduct a preliminary screening and may seek clarification or supplementary information from both the design consultant/company and the MSME. After screening, IA will submit the application together with its recommendation to Project Monitoring & Advisory Committee (PMAC) for consideration.

MSME innovative scheme guidelines

After submitting a proposal under the design scheme, the Host Institute has an assessment criterion it follows to approve the design ideas. Given below are the assessment criteria for the design scheme:

  • 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
  • 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
  • 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

MSME Innovative scheme is one of the schemes of MSME sector that seeks to boost innovations by MSMEs. With the help of the scheme, the government is trying to encourage entrepreneurs and guide them in the development of new concepts and financially help them with innovative ideas. There are also other government schemes for start-ups and entrepreneurs that are available.

For business growth opportunities visit Tata nexarc and explore a slew of offerings designed specifically for MSME growth.

Also Read:
MSME Sampark scheme
RAMP Scheme for MSMEs
SIDBI Loan schemes for MSMEs
MSME Samadhaan
CETPs MSME scheme – Benefits, guidelines, documents, eligibility