LEAN Scheme

The Micro, Small and Medium Enterprises (MSMEs) sector is a vital component of the Indian economy, contributing significantly to GDP, employment generation, and exports. Despite their importance, many MSMEs face challenges such as limited access to technology, inadequate capital, and lack of exposure to global markets. The MSME Competitive (LEAN) Scheme was launched by Union Minister for MSME Shri Narayan Rane to address these challenges and improve the global competitiveness of Indian MSMEs. Let’s take a closer look at the scheme and its key features.

Understanding LEAN Manufacturing Practices

LEAN manufacturing practices are a set of methodologies that focus on reducing waste, improving quality, and increasing productivity. These practices originated in Japan, and their success has been demonstrated in several industries, including automotive, electronics, and healthcare. LEAN manufacturing practices involve the following methodologies:

  • 5S: This methodology aims to create a workplace that is organized, clean, and efficient. The 5S principles include sorting, simplifying, sweeping, standardizing, and sustaining.
  • Kaizen: Kaizen means continuous improvement. This methodology involves identifying opportunities for improvement and implementing changes to processes, equipment, and systems.
  • KANBAN: KANBAN is a visual scheduling system that aims to improve workflow efficiency and reduce inventory levels.
  • Visual Workplace: This methodology involves creating a workplace that is easy to understand and navigate, using visual cues such as signs, labels, and color codes.

Key Features of the Scheme

The MSME Competitive (LEAN) Scheme aims to encourage MSMEs to adopt LEAN manufacturing practices and become competitive and profitable. The scheme has the following key features:

  • Implementation Cost: The government will contribute 90% of the implementation cost for handholding and consultancy fees. This will enable MSMEs to receive expert guidance on implementing LEAN manufacturing practices.a
  • Additional Contributions: MSMEs in SFURTI clusters, those owned by women/SC/ST, and those registered through Industry Associations or OEM organizations will receive additional contributions. This will ensure that MSMEs from marginalized sections of society also benefit from the scheme.
  • Eligibility Criteria: To be eligible for the scheme, MSMEs must have a valid Udyog Aadhaar Memorandum (UAM) and must not have availed of similar benefits under any other scheme. MSMEs must also be willing to implement LEAN manufacturing practices for at least six months.
  • Scheme Duration: The scheme will be implemented for a period of three years, from 2021-22 to 2023-24.


The scheme will enable MSMEs to improve their competitiveness, reduce costs, improve product quality, and increase productivity. This will help them to become profitable and sustainable in the long run.

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