How ASPIRE scheme is promoting rural innovation to create 75k jobs in 2019-20

ASPIRE has three major components: Livelihood Business Incubators (LBI), Technology Business Incubators (TBI), and a fund to be managed by Small Industries Bank of India (SIDBI).

Tuesday September 17, 2019 , 5 min Read

Coir, khadi, bamboo, cane, and other traditional industries are prominent means of livelihood for lakhs of Indians. However, unemployment is on the rise, and the MSME ministry has been implementing A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE) to create new jobs in traditional and agri-based industries.

The scheme is also aimed at promoting entrepreneurship culture in India, boosting grassroots economic development at the district level, facilitating innovative business solutions for unmet social needs, and promoting innovation to further strengthen the competitiveness of the MSME sector.

It does this by implementing incubation and commercialisation of Business Ideas Programme through technical/research institutes, including those in the field of agro-based industry. These would be designated as Knowledge Partners and would incubate new/existing technologies for their commercialisation.

ASPIRE has three major components: Livelihood Business Incubators (LBI), Technology Business Incubators (TBI), and a fund to be managed by Small Industries Bank of India (SIDBI).

The Budget 2019 proposed that 80 livelihood business incubators and 20 technology business incubators will be set up in 2019-20 under this scheme.

"The aim is to develop and train 75,000 skilled entrepreneurs in agro-rural industries," Finance Minister Nirmala Sitharaman had said.

How it works

Livelihood Business Incubators

The main objective of LBIs is to create jobs at the local level and reduce unemployment by creating a favourable ecosystem for entrepreneurial development in the country. The main focus area under LBI is to take up those commercial activities that are need-based and help create enterprises in the rural areas of the country.

The LBI programme will be implemented through the National Small Industries Corporation (NSIC), Khadi and Village Industries Commission (KVIC), or Coir Board or any other institution/agency of the Central or State government. These organisations will promote entrepreneurship and skill development and pursue live demo projects.

According to government guidelines on ASPIRE, such centres will see a one-time grant of 100 percent of cost of page two plant and machinery (other than the land and infrastructure, or an amount up to Rs 100 lakh, whichever is less) provided by the government.

Private partner institutions and entities can also set up livelihood incubation centres under PPP mode with the aforesaid institutions, namely, NSIC, KVIC or Coir Board, or any other institution/agency of Government of India/State government.

In these cases, a one-time grant of 50 percent of cost of plant and machinery (other than the land and infrastructure, or Rs 50 lakh, whichever is less) will be provided. A total number of 150 such centres are being targeted to be set up under this component, with an estimated financial outgo of Rs 135 crore.

Technology Business Incubators

The Ministry of MSME under ASPIRE supports existing incubation centres, currently operating under different ministries and departments of the Government of India or institutions including national/regional level institutions of GoI/State governments to set up centres dedicated to incubation and enterprise creation in the area of agro-based industries.

The ministry supports Technology Business Incubators primarily in and around academic and technical institutions to tap potential technology ideas and innovations for enterprise creation by effectively utilising expertise and existing infrastructure already available with the incubators.

The ministry also assists in setting up new incubation centres by eligible private institutions, including industry associations, along with the page seven academic institutions, R&D laboratories, universities, government entities, and technology parks.

A one-time grant of 50 percent of cost of plant and machinery (excluding the land and infrastructure or an amount up to Rs 30 lakh, whichever is less) is provided for supporting 20 existing incubation centres under different ministries or departments or government-funded institutions to set up centres dedicated to incubation and enterprise creation in the agro-based industry.

Further, a one-time grant of 50 percent of cost of plant and machinery (excluding the land and infrastructure, or an amount up to Rs 100 lakh, whichever is less) is provided for setting up of new incubation centres by eligible agencies dedicated to incubation and enterprise creation in the agro-based industry.

Funds to be managed by SIDBI

The ASPIRE fund under SIDBI (with a corpus fund of Rs 60 crore) is to be augmented with an amount of Rs 250 crore, making the total corpus Rs 310 crore.

The ‘Fund of Funds’ is utilised by SIDBI to contribute to various angel/venture capital funds (currently known as Alternative Investment Fund, or AIF) for investing in startups/early-stage enterprises.

Under ASPIRE, investment by AIF is made only in companies that are rural and agro-focused, and not in companies that are exclusively information technology enterprises.

This startup promotion targets those knowledge initiatives that need support and nurturing to succeed in developing technology and business enterprises in the areas of innovation, entrepreneurship, forward and backward linkages, etc in agro-based industry verticals.

How to apply

The application can be sent to Aspire Scheme Steering Committee of the Ministry of MSME. The Scheme Steering Committee will be responsible for overall policy, coordination, and management support. The Council will be chaired by Secretary, Ministry of MSME.

Whom to contact

Deputy Secretary (ARI), M/o MSME

Ph: 011-23062745,

Email: [email protected]

Click here for complete guidelines on the ASPIRE scheme.