Credit Linked Capital Subsidy Scheme CLCSS

Credit Linked Capital Subsidy Scheme

The SSI Ministry runs a program called the Credit Linked Capital Subsidy Scheme (CLCSS) for the technology up-gradation of Small-Scale Industries (SSI). Also, the Scheme aims to promote the upgrading of technology.

By providing SSI units, including small, khadi, village, and coir industrial units, with upfront capital subsidies on institutional finance (credit). Therefore, also use by them for the modernization of their production equipment (plant and machinery) and techniques.

Introduction to Credit Linked Capital subsidy scheme (CLCSS)

The CLCSS is the Ministry of Micro, Small, and Medium Enterprises’ creative credit product launch. However, the primary objective of this scheme is to aid the technology up-gradation of micro and small enterprises. Especially in rural and semi-urban areas.

In India, a significant number of small-scale sectors are still operating with obsolete technology. They are unable to upgrade their machinery due to the non-availability of funds. Also, helps small-scale industries upgrade their equipment and plant machinery by offering capital subsidies on the purchase of machinery.

So, the Scheme (pre-revise) provides for SSI units including tiny units with a 12% capital subsidy. That too on institutional financing for the induction of well establish the technology. In selected sub-sectors/products approved under the Scheme. Also, the qualifying subsidy amount defines following the pre-revised scheme. That was based on the actual amount of the loan not exceeding Rs.40 lakh.

Eligibility for Credit Linked Capital Subsidy Scheme CLCSS

Eligibility for the CLCSS?

  • Firstly, Micro and small enterprises referring to the 51 sub-sectors mention by the Ministry of MSME are eligible for capital subsidy. 
  • The subsidy is open to current and new companies alike. 
  • Also, the subsidy open to small and micro enterprises in rural and urban areas. 

Both micro and small enterprises having a valid UAM number have access to this system. Sole-ownerships, partnerships, private limited companies like khadi, small industry, cottage industries, coir units, village industries and more can include. 

However, if you want to upgrade the facilities for your plant or industry. Make sure you find out if the 15 percent subsidy opens for this program.

Objective of Credit Linked Capital subsidy scheme 2020

The upgrade version of the scheme aims at facilitating technology upgrades by providing SSI units. Also, including small, khadi, village, and coir industrial units. With a 15 percent upfront capital subsidy with effect from 29 September 2005. 12 percent before 29.09.2005 on institutional finance use by them for the induction of improvising technology.

Also, on institutional finance of up to Rs 1 crore avail by them. For the implementation of well-established and improved technology in the following 51 accredited sub-sectors / products.

In other words, the main aim is to upgrade their plant & machinery with state-of-the-art technology, with or without expansion. So, new MSEs that develop their facilities with suitable proven technology duly certifies under the rules of the scheme.

Loan loans eligible for Capital support:
  1. Ceiling with a loan- Rs.100.00 Lac.
  2. Also, the ceiling on Capital Subsidy- 15%. Worth of investment equipment & equipment depending on the maximum Rs.15.00Lac.
Scope of the Scheme

So, the scheme covers the following requirements/products / technical fields:

  1. Biotech Industry
  2. Herbal Therapy for Common Use
  3. Tile Boxes
  4. Drugs & Drugs
  5. Dyes and Medium
  6. A field-based on medicinal plants and fragrances
  7. Plastic / molded plastic products and parts/parts
  8. Rubber processing includes Cycle / Rickshaw Tires
  9. Food Processing (including Ice Cream Production)
  10. Chicken Hatchery & Cattle Feed Industry
  11. Large-Scale Stone Industry (excluding excavation)
  12. Glass and Ceramic materials include Tiles
  13. Leather Products and Leather Products including Shoes and Clothing
  14. Electronic equipment testing, measurement and also assembly/production, industrial process control;
  15. Analytical, Medical, Electronic Consumer & Communication Equipment, etc.
  16. Fans & Automotive Industry
  17. General Light Service (GLS) lights
  18. Hardware Information (Hardware)
  19. Minerals Filled With Sheathed Heating Elements
  20. Transformer, Electrical Stampings, Laminations, Coils or Chokes also including Solenoid coils
  21. Cables and also Cable Industry
  22. Default Parts and Parts
  23. Bicycle parts
  24. Fire Devices or Utilities
  25. BUILDING & Hand Tools
  26. Foundries – Iron and Cast Iron
  27. General Engineering Works
  28. The inclusion of gold and jewelry
  29. Keys
  30. Metal Furniture
  31. Toys
  32. Non-Door Foundation
  33. Sporting Goods
  34. Cosmetics
  35. Readymade Clothes
  36. Wooden furniture
  37. Mineral Water Bottle
  38. Paint, Varnishes, Alkyd, and Alkyd products
  39. Agricultural Services and Postal Services
  40. Graphite and Phosphate Benefits
  41. Card and Village Industries
  42. Coir and Coir products
  43. Steel Re-rolling and/or Industrial Pencil Ingot
  44. Zinc Sulfate
  45. Welding electrodes
  46. Sewing Machine Industry

So, as the Scheme progresses, the list of sub-products / sectors can expand by adding new technologies, products, and categories. Also, with the approval of the Competent Authority, namely the Technology and Management Committee (GTAB) / CLCSS Subcommittee (TSC).

Nodal Agencies currently under CLCSS

So, the inclusion of the list above nodal banks/agencies adds to the existing nodal agencies. Name as, the Small Industries Development Bank of India (SIDBI). Also, the National Bank for Agriculture and Rural Development (NABARD) under the CLCSS. Therefore, these nodal banks/agencies accept suggestions only with regard to their respective branches’ approval of credit. Whereas SIDBI and NABARD remain the nodal agencies for other Primary Lending Institutions (PLI).

The cut-off date for implementing the earlier decision is April 04, 2006. Also, no plans after this cut-off date sent to the SIDBI or the NABARD. As the case by these banks/agencies and the new nodal banks/agencies start processing proposals. Shortly after this cut-off date for the release of subsidy under the CLCSS.

Also, other modalities for executing the above decision continue the same. As are currently in practice in the state of the SIDBI and the NABARD.

Benefits of CLCSS

The program offers a variety of benefits to small industries including:

  • It assists in the development of technology for small-scale industries of various sectors/sectors of production as announced by the MSME Department.
  • Also, it provides a 15% subsidy for the purchase of suitable plant and equipment. Therefore, this helps to reduce the total loan burden for small and medium enterprises.
  • Moreover, it contributes to the growth of rural industries that can now produce high-quality products.
Steps for Applying Credit Linked Capital Subsidy Scheme CLCSS
Steps to Apply for Credit Linked Capital subsidy scheme
  1. Firstly, you require to apply through your Primary Lending Institution as mention. After that, the complete application getting loan uploads by the PLI to MSME for the release of funds.
  2. Secondly, you can visit in with your credentials on the MSME website
  3. After that, it takes you to a home page with a summary of the scheme. Also, it recommends that you change your password. Importantly you now click on the “Apply for Subsidy” section on your left in the User Task menu to continue.
  4.  After that fill in your basic information and proceed. You get a single specific form that adds to your needs. Also, relevant values. Moreover, Point 4 on tab 3 of the form needs to calculate the subsidy.
  5. Also, You can add multiple divisions and Equipment or Machinery. Even their corresponding values ​​ensure that they maintain and continue to complete your details.
  6. After that, you can next visit and Edit/Change your application if need.
  1. Thereafter, once you apply the reviewing process of essential starts. You’ll get the application back for an explanation from the Nodal office. After that requested clarification needs to be done.
  2. For successful cancellation of both Nodal Certificates. Your application subject to financial penalties. Therefore, depending on the availability of funds and the advanced level of the applicant as stated in the eligibility conditions.
  3. So, now you can follow up on the situation. Also, can contact the official concern with the information provided on the website.
  4. Upon successful approval, the funds transfer to reputable agencies. Therefore, transfers to their respective places where the applicant has his or her account.
Documents Required in CLCSS

So, the Eligible small and medium enterprises must submit the following documents for obtaining CLCSS funding.

  1. Individual and business PAN card
  2. Aadhaar Card / Voting ID (with proof of identity)
  3. Proof of your address
  4. Proof of business address
  5. Latest passport size photos
  6. Proof of business such as in-depth collaboration, company registration, etc.

In addition to these documents, the program beneficiary requires to provide additional KYC documents as need.


However, the success of the CLCSS up-gradation program for the acquisition of a working capital that can pass. Therefore, Continuing institutions need assurance that borrowers have made adequate arrangements to meet operating finance requirements.

However, the debtor’s security, foreclosure fees, and other factors must consider by the major lending agency according to standard procedures. Therefore, CLCSS subsidized Units not receive any additional technical support funding from the Central or  State Government. However, in contrast, Units in the North East region may benefit from both at the same time.

Lastly, it is important to know that the lending agency may set conditions to ensure sound financial management. 

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