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What Is CLCSS Or Credit Linked Capital Subsidy Scheme? What are the Benefits of CLCSS for Technology Upgradation?


“Any sufficiently advanced technology is equivalent to magic.” – Sir Arthur C. Clarke

For the prosperity and success of MSMEs, technology plays a pivotal role. Especially in the manufacturing sector, regular and consistent investment in advanced technology (machinery and equipment) is required to maintain quality and to stay ahead of competitors.

To meet global demand and optimize productivity, manufacturing companies are always in need of capital.

Although India is the Hubspot of technological innovations, many small scale industries are still working with antiquated technology. 

Lack of access to funding and capital is the primary reason. 

This is where the CLCSS scheme comes into play. 

In this blog, we will provide you with all the information about the CLCSS scheme, CLCSS subsidy scheme, and the list of products and industries covered under CLCSS.

To help entrepreneurs and MSMEs, we will also inform how to apply for CLCSS subsidy, documents required, and benefits of credit linked capital subsidy schemes. 

Also, if you are seeking some expert guidance regarding the same, we have got you covered there too. 

What Is a Credit Linked Capital Subsidy Scheme?

With the cost of machinery and advanced technology becoming more and more expensive, MSMEs are not able to upgrade themselves, which is directly impacting their output.

Understanding this challenge, the Ministry of MSME has launched an innovative upfront credit scheme called credit linked capital subsidy scheme for technology upgradation.

Peculiarly in semi-urban and rural areas, CLCSS subsidy helps small and micro enterprises upgrade their technology by providing financial and capital aid on the purchase of machinery.

The scheme offers 15% subsidy on institutional finance, upto Rs 1 crore, to medium-small and micro enterprises on high-tech machinery investment.

Only those businesses can avail of this scheme’s benefits who have invested in technology using term loans borrowed from PLIs (Public Lending institutions).

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Benefits Of Credit Linked Capital Subsidy Scheme For Technology Upgradation

  • With a 15% subsidy on the purchase of advanced technology, the MSMEs’ loan burden decreases.
  • At the same time, their efficiency increases, the cost of production decreases which results in maximized profit, and higher growth.
  • With the growth in rural industries, employment opportunities increase, and living conditions for the entire local population improves.
  • Thanks to this unique scheme, even micro, small and medium industries can now manufacture high-quality products, and compete globally.
  • Credit linked capital subsidy scheme is helping small scale industries to adapt and scale, and boost their production.

Eligibility For CLCSS

  • To take advantage of the CLCSS subsidy, MSMEs must have a valid UAM number.
  • The aid is available to both existing and new enterprises.
  • The enterprise must fall under 51 sub-sectors mentioned by M/o MSME.
  • If the enterprise is an export-oriented or labour-intensive sector, it will be considered for the subsidy.
  • Eligibility for credit linked capital subsidy scheme is not linked to any refinance scheme for the nodal agencies.
  • There are 12 nodal agencies for allocating the funds under this scheme: SIDBI, NABARD, Indian Bank, Bank of India, State Bank of Bikaner and Jaipur, Bank of Baroda, Canara Bank, Corporation Bank, State Bank of India, Andhra Bank, PNB, And Tamil Nadu Industrial Investment Corporation.

How To Apply For CLCSS Subsidy

From 2013, online application and tracking have been introduced for applying for CLCSS subsidy. From PLI (Primary Lending Institution), the beneficiary is needed to apply for a CLCSS subsidy.

After this, the beneficiary has to fill an application form available with Primary Lending Institution, which will be uploaded on the online portal by PLI. Now, the uploaded application will be sent to the attached nodal agency, which upholds the application to the Office of DC (MSME).

After the complete verification, the Office of DC (MSME) approves the release of credit linked capital subsidy.

From the nodal agency, the money reaches the PLI of the beneficiary and from there to the beneficiary.

Please Note: The scheme at present is under revisal by the Ministry of MSME which will release official details soon.

Documents Required For CLCSS

  • PAN Card of the Beneficiary and the Business
  • Identity Proof, Aadhar Card or Voter Card
  • Address proof, Personal and Business
  • Photographs, Recent Passport Size 
  • Proof of business like partnership deep, company registration, etc
  • Other KYC documents as required
  • Company registration proof
  • Proof of type of company, partnership, sole proprietorship, or any other

List Of Products And Industries Covered Under The CLCSS

  1. Drugs and Pharmaceuticals 
  2. Printing industry
  3. Bicycle parts
  4. Paints and Varnishes
  5. Biotech industry
  6. Food Processing
  7. Coir Products
  8. Hardware for Information Technology
  9. Fans and Motors
  10. Welding electrodes
  11. Forging and Hand Tools
  12. Industrial Gases
  13. Steel rolling
  14. Sports Goods
  15. Sewing Machine Industry
  16. Mineral Water Bottle
  17. Industry based on medicinal and Aromatic plants
  18. Heating elements
  19. Cosmetics
  20. Toys
  21. Zinc Sulphate
  22. Combustion Devices and Appliances
  23. Poultry Hatchery & Cattle Feed Industry
  24. Glass and Tiles
  25. Locks

Please visit the official website of the Ministry of MSME for the complete list.

With so many steps and requirements in the process, you must be seeking the help of a professional veteran in the field for some right guidance. This is where we, at MSMEx.in, can help you, instantly, and live.

MSMEx is a micro-advisory platform, which provides entrepreneurs, MSMEs, and startups with expert business advice. 

Get a detailed CLCSS subsidy scheme information from our experts today in just a few clicks. 

All you need to do is, book an appointment here and facilitate technology upgradation for manufacturing from out-dated to up-to-date.

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