Short Description
The Credit Linked Capital Subsidy Scheme (CLCSS) is a flagship initiative of the Ministry of Micro, Small and Medium Enterprises (MSME) aimed at facilitating technology upgradation for Micro and Small Enterprises (MSEs).
Objective
Modernization: To help small businesses replace outdated machinery with state-of-the-art technology.
Competitiveness: To improve product quality and reduce production costs, enabling MSEs to compete globally.
Efficiency: To promote energy conservation and environmental-friendly production techniques.
Scaling: To assist units in expanding their production capacity and transitioning to a larger scale of operations.
Benefits / Subsidy
Benefit Type
Machinery Loan
Coverage
Upto 15% Subsidy
Upfront Capital Subsidy: Provides a 15% subsidy on institutional finance availed for the purchase of plant and machinery.
Financial Cap: The maximum loan amount eligible for the subsidy is ₹1 crore, making the maximum subsidy ₹15 lakh.
Special Category Incentives: SC/ST entrepreneurs may receive a higher subsidy of 25% (up to ₹25 lakh) under the Special CLCSS (SCLCSS).
Reduced Loan Burden: The subsidy is credited directly to the loan account, reducing the overall principal and interest burden.
Eligibility
Enterprise Type: Only Micro and Small Enterprises (MSEs) (new or existing) in the manufacturing sector are eligible.
Social Categories: Units owned by SC/ST entrepreneurs, women, and those located in the North-East or hilly regions are often given preference.
Specific Sectors: The scheme covers 51 approved sub-sectors, including:
Food Processing and Pharmaceuticals.
Textiles, Leather, and Auto Components.
Electronics, IT Hardware, and Agricultural Implements.
Nature of Purchase: Subsidy is applicable only for new machinery; second-hand equipment is strictly excluded.
Documents Required
Udyam Registration Certificate (or valid UAM number).
Identity & Address Proof: Aadhaar card, PAN card (Business and Personal), and Voter ID.
Business Proof: Partnership deed, MoA/AoA, and business establishment proof.
Financial & Technical Data:
Project report detailing the technology upgrade.
Quotations and invoices for the new machinery.
Recent passport-sized photographs and standard KYC documents.
Application Process
Bank Approach: Eligible units must approach an approved Primary Lending Institution (PLI) to sanction a term loan for machinery purchase.
Online Application: The PLI uploads the subsidy claim on the Online Application and Tracking System on behalf of the applicant.
Nodal Agency Verification: The application is forwarded to the designated Nodal Agency for verification and recommendation.
Approval & Disbursement: After approval from the Office of the Development Commissioner (MSME), the subsidy is released to the Nodal Agency, which then transfers it to the unit’s loan account at the PLI.
The scheme is implemented through 12 nodal agencies, primarily:
SIDBI (Small Industries Development Bank of India).
NABARD (National Bank for Agriculture and Rural Development).
Major Public Sector Banks: Including SBI, Bank of Baroda, Canara Bank, and Bank of India.
Other Agencies: NSIC (National Small Industries Corporation) and TIIC (Tamilnadu Industrial Investment Corporation).
