Pursuant to the recommendations of the Expert Committee on Small Enterprises (Abid Hussain Committee) and encouraged by the positive results in most of the developed and developing countries demonstrating that cluster approach has emerged as one of the innovative and effective ways for small industries development, Government of India introduced the National Programme on Rural Industrialisation(NPRI) under which 100 rural clusters had to be developed every year for the next five years from 1999-2000.

 

The paper attempts to emphasise on the Cluster Development Programme of Ministry of Micro, Small and Medium Enterprises and how it has benefitted in encouraging entrepreneurship in the state of Maharashtra. 

 

The Small and Medium Enterprise (SME) sector has emerged as an engine of growth in the new Millennium. Small enterprises exist in the form of factories, workshops trading and service organizations and range from the most modern and up-to-date enterprise to the simple and traditional units. The operational range varies from independent enterprises to ancillaries, subcontractors and vendors engaged in catering to the needs of the markets, extending from the domestic to the global horizon. Though the main objectives of SMEs are almost the same, they are defined and viewed differently in different countries.

 

 

There is ample evidence that small and medium scale enterprises (SMEs) operating in the same or in related industrial sectors tend to be in a cluster close to one another. This tendency to bunch in well defined areas has been observed in different environments in both developed and developing countries. There are sound economic reasons for this phenomenon. SMEs operating in such clusters derive a clear competitive advantage from:

SME clustering is common in many developed countries such as Italy, Germany, the USA, and Japan. Evidence on clusters in Latin America, Asia, and to a lesser extent in Africa, is also available. Since 1993, UNIDO, through its Private Sector Development Branch, has developed an approach to help government and the private sector to co-operate in the design and implementation of programmes to promote the organization and development of clusters and networks of SMEs. The programme draws lessons from the experience of successful clusters and it implements them through technical cooperation projects in various developing countries. Some of the countries where this approach has been introduced are India, Indonesia, Malaysia, Mexico, Nicaragua, Honduras, Jamaica, Bolivia, Madagascar, Morocco and Tunisia. The concept was introduced in India in the Ninth Plan with the assistance of UNIDO. The Abid Hussain ‘Expert Committee on Small Enterprises’ constituted in 1996 by the Government of India advocated cluster-support policies as the centerpiece of small enterprise development. Interestingly , the cluster development process is also being discussed or tested out for its impact on various thematic issues including poverty reduction, corporate social responsibility, entrepreneurship, human resources development, livelihood financing etc.