Important government programs for transforming unorganized sector in India

Here’s an exhaustive, but by no means complete, list of schemes which I think if accessed properly and through efficient institutions, can tackle the challenges faced by unorganized sector. For simplicity, I’ve included only the schemes under central government and its departments. Each state government has countless other schemes which should be explored in conjunction to these.

Star schemes to address security

1. National Social Assistance Programme (NSAP): This scheme provides financial assistance to elderly, disabled, and widowed individuals who are living below the poverty line. It aims to provide social security to vulnerable workers in the unorganized sector.

2. National Health Protection Scheme (NHPS): This scheme provides health insurance coverage to economically vulnerable families. It aims to provide access to quality healthcare to workers in the unorganized sector.

3. Pradhan Mantri Suraksha Bima Yojana (PMSBY): This scheme provides accidental insurance coverage to individuals at a low premium. It can provide a safety net for workers in the unorganized sector who are engaged in hazardous occupations or who may be at risk of accidents.

4. Atal Pension Yojana (APY): This scheme provides a pension to workers in the unorganized sector. It aims to promote savings among workers and provide them with a regular source of income after retirement.

5. National Rural Employment Guarantee Act (NREGA): This scheme guarantees a minimum of 100 days of employment to every rural household in India. It aims to provide job security and income support to workers in the unorganized sector.

These are just a few examples of the many government schemes that aim to organize and support the unorganized sector in India.

Schemes aimed to provide financial access to self-employed, freelance and unorganized workers

There are several government schemes in India that are meant to support self-employed, freelancing, contractual and seasonal workers, women, and artisans with irregular incomes to organize themselves. Some of these schemes are:

1. Pradhan Mantri Mudra Yojana (PMMY): This scheme provides loans to micro and small enterprises to help them start or expand their businesses. It aims to promote self-employment and entrepreneurship among workers in the unorganized sector.

2. Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM): This scheme aims to reduce poverty and vulnerability among urban poor households by promoting self-employment and skill development. It provides support for setting up self-help groups, training in trades and skills, and access to credit and marketing opportunities.

3. Stand-Up India Scheme: This scheme aims to promote entrepreneurship among women and marginalized communities by providing loans for setting up new enterprises. It is available to both new and existing enterprises, and can help self-employed and freelancing workers to organize themselves and access credit.

These are examples of government schemes in India that are meant to support self-employed, freelancing, contractual and seasonal workers, women, and artisans with irregular incomes to organize themselves.

Artisans, handicrafts, self-help groups related

Some examples of government schemes in India that are meant to support traditional artisans and craftsmen to get organized and improve their livelihoods also include:

1. National Handicrafts Development Programme (NHDP): This scheme provides support for the development of handicrafts and handlooms, which can benefit artisans with irregular incomes. It provides support for training, design, and marketing, which can help artisans to organize themselves and access new markets.

2. Scheme for Capacity Building in Textile Sector (SCBTS): This scheme provides support for the development of skills and capacities in the textile sector, and can benefit traditional artisans who are engaged in textile production. It provides support for training, design, and technology upgradation, which can help artisans to improve the quality and competitiveness of their products.

3. Technology Upgradation Fund Scheme (TUFS): This scheme provides support for the modernization and upgradation of textile machinery and equipment, which can benefit traditional artisans who are engaged in textile production. It can help artisans to improve their productivity and competitiveness, and can facilitate their integration into global value chains.

4. National Livelihoods Mission (NRLM): This mission aims to reduce poverty among rural households by promoting self-employment and entrepreneurship, and can benefit traditional artisans who are engaged in handicrafts and handlooms. It provides support for the formation of self-help groups, training in trades and skills, and access to credit and marketing opportunities.

Office of the Development Commissioner (Handicrafts) provides support for the development of handicrafts and handlooms, and aims to promote the welfare of artisans. It provides support for training, design, marketing, and access to credit, which can help artisans to organize themselves and improve their livelihoods.

Cluster development schemes

Government of India has launched several cluster development schemes and cooperative movements to support the organization of traditional artisans, small and micro-enterprises, and other informal sector workers.

Cluster development schemes aim to promote the development of industrial clusters in specific geographic areas. These clusters bring together small and micro-enterprises that share common production processes, markets, and technologies. By working together, these enterprises can benefit from economies of scale, share resources, and access new markets. Some of the government schemes that support cluster development include:

1. Micro, Small and Medium Enterprises Cluster Development Programme (MSME-CDP): This scheme aims to support the development of industrial clusters by providing assistance for the creation of common infrastructure facilities, technology upgradation, skill development, and marketing support.

Here are some highlights and important links for the Micro, Small and Medium Enterprises Cluster Development Programme (MSME-CDP) scheme:

Objective: The objective of the MSME-CDP scheme is to promote the development of industrial clusters by providing assistance for the creation of common infrastructure facilities, technology upgradation, skill development, and marketing support.

Eligibility: The scheme is open to all new and existing micro, small, and medium enterprises (MSMEs) in India.

Assistance: The scheme provides financial assistance for the following activities:

• Setting up of common infrastructure facilities such as testing centres, design centres, training centres, and raw material depots.
• Technology upgradation and modernisation of production processes.
• Skill development and training for MSMEs and their employees.
• Marketing support through trade fairs, exhibitions, and buyer-seller meets.

Implementation: The scheme is implemented by the Ministry of Micro, Small and Medium Enterprises (MSME), Government of India, through its various field institutes such as the District Industries Centres (DICs), Khadi and Village Industries Commission (KVIC), and Coir Board.

Funding: The scheme provides up to 90% of the project cost as a grant to the implementing agencies, with the remaining 10% being contributed by the beneficiary MSMEs.

Important links:

• MSME-CDP Guidelines: https://msme.gov.in/sites/default/files/MSME_CDP_Guidelines.pdf
• List of MSME field institutes: https://msme.gov.in/field-institutes
• Online application portal for MSME schemes: https://udyamsakhi.org/
• Frequently Asked Questions (FAQs) about MSME-CDP: https://msme.gov.in/faq/msme-cdp

2. Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE): This scheme aims to promote entrepreneurship and innovation in rural and backward areas by supporting the creation of business incubators, providing funding for startups, and facilitating technology transfer.

3. Comprehensive Handicrafts Cluster Development Scheme (CHCDS): This scheme aims to support the development of handicrafts clusters by providing assistance for the creation of common infrastructure facilities, technology upgradation, skill development, and marketing support.

Schemes aimed at co-operatives

Cooperative movements aim to promote the formation of cooperatives, which are organizations that are owned and controlled by their members. These organizations can provide a range of services, such as access to credit, marketing support, and training, to their members. Some of the government schemes that support cooperative movements include:

1. National Agricultural Cooperative Marketing Federation of India (NAFED): This federation provides marketing support for agricultural products produced by cooperatives.

2. National Cooperative Development Corporation (NCDC) – The NCDC is an apex financial institution in the cooperative sector, which provides financial assistance to cooperatives through its various schemes such as the Cooperative Development Fund (CDF), the National Cooperative Marketing Development Fund (NCMDF), and the Cooperative Education Fund (CEF).

3. National Cooperative Union of India (NCUI) – The NCUI is a national level organization that provides technical and financial assistance to cooperatives and works towards the promotion and development of the cooperative movement in the country.

4. Cooperative Development Scheme (CDS) – The CDS is a centrally sponsored scheme that provides financial assistance for the creation of infrastructure, capacity building, and marketing support for cooperatives. The scheme is implemented by the National Cooperative Development Corporation (NCDC).

5. Scheme for Assistance to Cooperatives (SAC) – The SAC is a scheme launched by the Ministry of Agriculture and Farmers Welfare, which provides financial assistance for the formation of new cooperatives, capacity building, and market development.

6. Startup Village Entrepreneurship Programme (SVEP) – The SVEP is a scheme launched by the Ministry of Rural Development, which provides support for the creation of self-help groups and producer groups, and promotes the development of micro-enterprises and cooperatives in rural areas.

7. National Livestock Mission (NLM) – The NLM is a scheme launched by the Ministry of Agriculture and Farmers Welfare, which promotes the formation of livestock cooperatives and provides support for the creation of infrastructure, capacity building, and market development for livestock products.

These are some examples of the cluster development schemes and cooperative movements that are supported by the government of India to promote the organization and development of traditional artisans, small and micro-enterprises, and other informal sector workers.

Schemes under various departments of MSME such as NABARD, NSIC, Khadi board, coir board, various state councils for agriculture, dairy etc. which help organize the unorganized sector.

1. National Bank for Agriculture and Rural Development (NABARD): NABARD provides financial assistance to small and marginal farmers, rural artisans, and other unorganized sector workers through various schemes such as the Rural Entrepreneurship Development Programme, the Micro Enterprise Development Programme, and the Rural Infrastructure Development Fund.

2. National Small Industries Corporation (NSIC): NSIC provides support to small and micro-enterprises through various schemes such as the Single Point Registration Scheme, the Performance and Credit Rating Scheme, and the Marketing Assistance Scheme.

3. Khadi and Village Industries Commission (KVIC): KVIC promotes the development of Khadi and village industries by providing financial assistance, training, and marketing support to artisans and entrepreneurs. Some of its schemes include the Prime Minister’s Employment Generation Programme, the Khadi Gramodyog Vikas Yojana, and the Market Promotion Assistance Scheme.

4. Coir Board: The Coir Board provides support to the coir industry by providing financial assistance, training, and marketing support to coir artisans and entrepreneurs. Some of its schemes include the Coir Vikas Yojana, the Skill Development Programme, and the Export Market Development Assistance Scheme.

5. State Councils for Agriculture and Dairy: Various state councils for agriculture and dairy provide support to farmers and dairy entrepreneurs through various schemes such as the Rashtriya Krishi Vikas Yojana, the National Livestock Mission, and the Dairy Entrepreneurship Development Scheme.

These are just some examples of the schemes under various departments of MSME that can help organize the unorganized sector. Each department has several other schemes that are tailored to the specific needs of different segments of the unorganized sector.

MSME scheme for Intellectual Properties especially for Geographical Indications

Innovation could be a powerful tool to transform the unorganized sector into a global enterprise. For this, any individual with a marketable idea should have the means to protect their idea and to bring it to a commercial utilization.

The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India has launched a scheme called the Intellectual Property Rights (IPR) for MSMEs and the Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE) to provide support to MSMEs for protecting their intellectual property rights, including Geographical Indications (GI).

Under the IPR for MSMEs scheme, MSMEs can avail financial support for filing and registration of patents, trademarks, and GI. The scheme also provides for reimbursement of up to 50% of the cost incurred by MSMEs for acquiring patent rights outside India, subject to a maximum limit of Rs. 15 lakhs per invention.

Under the ASPIRE scheme, the government provides financial support to technology business incubators (TBIs) and rural industries clusters for setting up of common facilities for design, production, and testing of products. The scheme also provides support for creating awareness and training programs for MSMEs on the importance of protecting their intellectual property rights, including GI.

Overall, these schemes provide a boost to the MSME and unorganized sector by promoting innovation and entrepreneurship and by protecting their intellectual property rights, including GI, which is crucial for branding and marketing of their products in domestic and international markets.

Concluding thoughts

While these schemes and institutions which govern such schemes are doing their share out there, the onus is on the youth and the community stakeholders to really get them to execution.

The biggest challenge has been the apathy of the people and leaders and their own inefficiency to track and measure the efforts. Corruption is also a bottleneck in many cases. Often the people just won’t come together for a cause.

The biggest hurdle is the lack of awareness and the in-depth understanding of how these scheme work. The complexities of the guidelines and frequent changes in the rules also leave out potential beneficiaries from availing the desired advantages.

One good way to get past all the above challenges is to find a scheme which best suites your ecosystem and stakeholder capabilities. Then create a workgroup to study, analyze and execute the requirements under the scheme.

If you are an enthusiastic socialpreneur and looking to work around your ways to help the unorganized sector, it is advisable to always bring onboard knowledgeable people, legal counsel, subject matter experts and advisors etc. to form a workgroup that can help navigate the impediments.

Article is written by Koustubh Bhattacharya. He has rich experience working with national and regional Governments in India for programs related to MSMEs. He has worked as Chief Operating Officer for a regional Chamber of commerce & Industry. This article was originally published by the author on LinkedIn.