A Scheme for Promotion of Innovation Rural Industries and Entrepreneurship (ASPIRE)

What is ASPIRE?

ASPIRE, A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship: is a Ministry of Micro, Small and Medium Enterprises scheme that funds business incubators in the agro-rural economy. ASPIRE is not a citizen benefit scheme: money goes to institutions that build and run incubation infrastructure, and entrepreneurs benefit only by being admitted as incubatees.

ASPIRE has two main components.

Livelihood Business Incubator (LBI)

The stated objective of an LBI is to create jobs at local level and reduce unemployment by building an entrepreneurial ecosystem for need-based commercial activities in rural areas. LBIs replicate the NSIC "Rapid Incubation Model", which mixes entrepreneurship promotion and skill development with live demo projects. LBIs are set up by NSIC, KVIC, the Coir Board or another institution or agency of the Government of India or a state government, and private partners can join in PPP mode with those agencies.

Technology Business Incubator (TBI)

TBIs focus on technologies that need support for commercialisation, primarily in and around academic and technical institutions. The Ministry supports existing incubation centres under other ministries and departments to set up dedicated centres for agro-based industries, and assists eligible private institutions, industry associations, academic institutions, R&D laboratories, universities, government entities and technology parks to set up new centres.

Who is eligible for ASPIRE?

These institutions can apply:

• NSIC, KVIC, the Coir Board or any other institution or agency of the Government of India or a state government, for a Livelihood Business Incubator.
• Private partner institutions and entities in PPP mode with those agencies, again for an LBI.
• Existing incubation centres operating under central ministries and departments, or under national and regional institutions of the Government of India or state governments, with adequate expertise and infrastructure.
• Eligible private institutions, including industry associations, along with academic institutions, R&D laboratories, universities, government entities and technology parks with a proven track record in promoting innovative or technology-based entrepreneurship in the agro-rural landscape.

Individuals cannot apply for a personal benefit under ASPIRE. There is no citizen application form, no online individual registration and no direct subsidy to a rural entrepreneur under this scheme. An entrepreneur reaches ASPIRE money only through an approved incubator, which selects incubatees through a transparent committee system and can then support a start-up from its seed capital fund. A start-up seeking direct credit should look at PMEGP or the MUDRA route instead.

Two further conditions rule out otherwise interested applicants:

• A TBI must produce proof of registration as a not-for-profit society, trust or Section 8 company before funds are released. A for-profit company cannot hold the TBI grant.
• A TBI must earmark a dedicated minimum of 5,000 sq ft of built-up space for the incubator under this scheme.

What documents are required for an ASPIRE proposal?

How to apply for ASPIRE

1. Decide which component fits. A Livelihood Business Incubator for skill-and-livelihood incubation in rural areas, or a Technology Business Incubator for commercialising agro-based technology.
2. Prepare the proposal in the prescribed proforma: Annexure-I (or Annexure-IB for PPP mode) for an LBI, and Annexure-II for an existing incubator or Annexure-IIB for a new one under the TBI component.
3. Obtain endorsement from the head of the designated agency: NSIC, KVIC, the Coir Board or another GoI or state government agency for an LBI, or from the head of the existing incubator or host institution for a TBI.
4. Send the proposal (two copies for a TBI) with all enclosures to The Member Convener, Scheme Steering Committee, ASPIRE, Office of the Joint Secretary (ARI Division), Ministry of Micro, Small and Medium Enterprises, Room No. 171, Udyog Bhawan, New Delhi-110011.
5. The proposal is appraised by the Advisory Committee constituted by MoMSME, made up of senior functionaries of NSIC, KVIC or the Coir Board and experts in incubation, entrepreneurship, startups, R&D, technology commercialisation and finance.
6. The Scheme Steering Committee takes the final decision on the Advisory Committee's recommendation.
7. Complete the pre-requisites, registration proof and dedicated built-up space for a TBI, matching PPP contribution for a PPP-mode LBI — and open a separate bank account for the grant.
8. Draw funds against milestones and file progress reports and utilisation certificates.

How much benefit does ASPIRE provide?

Livelihood Business Incubator

According to the Ministry of MSME's scheme page, an LBI set up by NSIC, KVIC, the Coir Board or another GoI or state government agency receives a one-time grant of 100% of the cost of plant and machinery, other than land and infrastructure, or up to Rs 100 lakh, whichever is less. An incubation centre set up in PPP mode with those agencies receives 50% of the cost of plant and machinery or Rs 50 lakh, whichever is less.

Grant for supporting ideas at a TBI

• Rs 2 lakh per idea, released after selection and submission by the Local Screening-cum-Expert Committee. At least 3 ideas must be recommended for grant support.
• Rs 1 lakh per idea on completion or closure, as recommended by the same committee.

Seed Capital Fund

An incubator can receive a seed capital fund of up to Rs 100 lakh, released in three instalments, Rs 40 lakh on signing the agreement and submitting profiles of at least three in-house incubatees, Rs 30 lakh after Rs 30 lakh of the first instalment has been used and a utilisation certificate filed, and a further Rs 30 lakh after Rs 60 lakh has been used. From this fund, an individual start-up can receive between Rs 1 lakh and Rs 20 lakh, with Rs 20 lakh the ceiling for the entire project, disbursed against milestones under a written agreement covering the instrument used, soft loan, interest-free loan, equity participation or grant.

Accelerator workshops

An approved agency can receive up to Rs 20 lakh per workshop, with 50% paid in advance and the balance on reimbursement.

How are ASPIRE funds released and monitored?

Funds for an LBI go directly to the designated agency, NSIC, KVIC, the Coir Board or another GoI or state government agency, which in turn releases money to PPP incubators. Release happens in three tranches: 50% after Scheme Steering Committee approval, 30% after the plant and machinery is installed, and the final 20% after training commences. For a PPP-mode incubator, the ministry's money moves only once the PPP partner has released its matching contribution.

The obligations that come with the grant are strict:

• Assets bought with the grant are the property of the Government of India and cannot be sold, encumbered or diverted without MoMSME permission.
• Grant money must sit in a separate interest-bearing bank account, with interest reported to the ministry.
• The agency cannot sub-contract implementation to another institution.
• The Comptroller and Auditor General has right of access to the books.
• MoMSME can terminate support at any stage if the grant is not being used properly, and can require the full amount to be refunded if the project is not completed within the sanctioned period.

For a TBI, financial support is limited to three years, after which the incubator is expected to be self-sustaining. Each incubator must have a full-time manager, a transparent selection system for incubatees, a Local Screening-cum-Expert Committee of at least five members, and its own website updated quarterly with incubatee details. Concerned agencies file monthly reports through the MIS.

Help and contact for ASPIRE

• Scheme Steering Committee, ASPIRE, ARI Division, Ministry of MSME: 011-23061543, telefax 011-23062858
• Email: js.ari@nic.in
• Address: Room No. 171, Udyog Bhawan, New Delhi-110011
• Portal: aspire.msme.gov.in

If you are an individual looking for capital to start a rural enterprise, the practical route is to approach an ASPIRE-supported incubator near you as an incubatee, or to apply under PMEGP; ASPIRE itself will not accept an individual application.