Posted On: June 11, 2022




Union Minister for MSME, Shri Narayan Rane launched MSME Innovative Scheme (Incubation, Design & IPR) this year to promote self reliant India. This scheme has been initiated with a purpose to help entrepreneurs in developing new ventures and to promote and support untapped creativity of MSME sector. The same will facilitate and strengthen innovation activities thereby focussing on transformation of ideas into viable business proposition to benefit society. These guidelines  have once again reiterated the importance of MSME sector in growth and development of nation. The scheme also aims to improve the IP culture by creating awareness of intellectual property rights amongst the MSMEs while taking suitable steps for protection of the IP assets developed by them. Knowledgentia Consultants which is known for Global IPR Protection has mentored many MSME’s to strengthen their business by working alongside them in developing their core IP and ideas into a running business.

The scheme has been divided into 3 verticals, namely

The incubation is further divided into 4 different phases:

  1. Recognition of an institution (HI) as Business Incubators (BI): 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 can apply to act as Business Incubator (BI) for nurturing of ideas.
  1. Approval of ideas submitted to the institute/BI: The ideas submitted to the institution go through 4 levels of screening-
  2. At institution level, the ideas are assessed from experts of different institution/industries, and the selected ideas are sent for first stage screening;
  3. The first stage screening is done by the Project Management Unit (PMU) and only the ideas disclosing the complete information and satisfying all the required condition are processed;
  4. After this the ideas are sent to the Domain Expert Selection Committees (DESCs) for further evaluation, and are categorized under one of the five different sectors (Agriculture, Healthcare/Life Sciences, Power/Energy, Services, and Miscellaneous sector). The DESC is comprised of Domain Experts from the industry/academia/government, One Expert from MSME DI, and One Member from Programme Division;
  5. Finally, the ideas that are selected by the DESC are sent to the PMAC for final approval, which are then granted financial assistance for further development.
  1. Assistance to the institution to support the idea: The financial aid is provided to the HIs is a maximum of Rs. 15 lakh per idea, which is subjected to a maximum limit of 85% of the total approved cost. This limit is not applicable however in case of students.
  1. Capital Support assistance to the institution for Plant and Machinery: In case of Plant and Machinery, the financial assistance is subjected to a maximum limit of Rs. 1.00 Cr to the HIs.

In case of this vertical, the beneficiary is required to be a registered should have a valid UAM or Udyam Registration.

The Design component is also divided into 2 major parts:

  1. Design project: For facilitating MSMEs to develop new design strategies and/or design related products.
  2. Design Awareness Programme: To create general awareness about the significance of design for businesses.

In case of regular design project, the GoI can contribute a maximum of Rs. 40 lakh, which can be 75% (for Micro Enterprise) or 60% (for Small & Medium Enterprise) of the total approved cost, while in case of student design project, a maximum assistance of Rs. 2.5 lakh is contributed, which can be 75% (for MSME) of the total approved cost.

The MSME submits the application through the Implementing Agency (IA), which conducts a preliminary screening; The IA recommends the applications to the PMAC and a Project Assessment Panel (PAP) review it before presenting to the PMAC; The PAP is comprised of MSME-DI officials, professionals, industrialists, businessmen, designers, academics or other expert individuals and functions to assess applications and project-costs, make recommendations, and monitor approved applications;

The IPR component offers legal and intellectual property filing support and provides IP Advisory, consultation, Patentability Searches, Technology Gap Analyses and IP commercialisation through IPFCs.

Agencies eligible for registering as IPFCs are-  MSME-Development Institutes, Technology Centres, 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.

The IPFC would be recognised as IA for 3 years, which is subjected to renewal after that period.

There are 3 recognized stakeholders for IPR Scheme:

  1. Ministry of MSME – PMAC,
  2. MSME-Development Institutes (MSME-DIs),
  3. Intellectual Property Facilitation Centre (IPFC).

The IPFCs are eligible for a maximum grant of Rs. 1 Crore and are accredited for a period of 3 years from its approval which can be renewed after that. The IPFC are required to provide free professional services to MSMEs, including pre-filing services, IP commercialisation, support to set up Innovation based enterprises, strengthening the IP portfolio of MSMEs, etc.

The MSMEs are also eligible for Reimbursement of cost incurred during the registration of their IP, subjected to condition that:

  1. In case of Patent, Trademark and Design Reimbursement:
    • The applicant must have a valid Udyam Registration.
    • Where the applicant is an individual, he/she must hold an Udyam Registration in his/her name and have at least 51% ownership in the enterprise.
    • A self-declaration by applicant for not claiming funding from any Central/State Government for the same patent/trademark/design.
  1. In case of Geographical Indication (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 are eligible for reimbursement of cost incurred during filing of the GIs.

The PMAC is the highest-level body or the apex body under this scheme and has AS & DC (MSME) as Chairperson. The scheme will also oversee the awareness & training programmes and will leverage the already existing partnerships of the Ministry of MSME with other public/private organisations. The scheme will fund 3 types of programmes i.e., Industry Awareness Programmes, Training Programmes, and Regional/State/National Workshops.

The scheme also provides financial support to MSMEs in setting up of business i.e., by assisting them with seed capital fund. The funds for this will be managed by SIDBI by creating a separate corpus. The seed capital support will be approved by PMAC on the recommendation of DESC. The seed capital support is subjected to the conditions that:

  • The idea has been approved and supported under the Incubation Scheme, or
  • the design projects have been approved under the Design Scheme, or
  • the applicant has applied for reimbursement of a granted patent.

The overall common stakeholders for these schemes are: Ministry of MSME, MSME-Development Institutes, Implementing Agencies (IA), Micro, Small & Medium Enterprises (MSME), and Other Ministries & Departments.

The MSME Innovative Scheme supersedes the CLCS – TU Scheme (which was discontinued on 31/03/2020) by integrating the 3 verticals (Incubation, Design & IPR). Under this the applicant can also opt any one from various combinations i.e.,

  1. Only Incubation OR Only Design OR Only IPR, or
  2. Incubation-Design-IPR, or Incubation-Design, or
  3. Incubation to IPR, or Design-IPR.

Under these, the financial assistance will be applicable for availing the benefits as per the individual scheme component.

The MSME innovative scheme is a progressive step in the direction of making India self-reliant by empowering the MSMEs to contribute more at the conceptual level. It aims to guide the innovative ideas of MSMEs to benefit the Indian society by converting them into a practically feasible proposition. Providing best services as registered start up facilitators with the Government of India,  we are you one-stop solution for all kinds of  legal, compliance and supplemental matters in case you are  a start up or an MSME. In case of any query regarding this matter you may email us at or visit our website –


Aparna Jain
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