Run by: DCE MSME

Applicable to: Existing and new MSMEs belonging to Small Scale Industries (SSI)

Technology is an essential component of every successful business. Until and unless manufacturing is aided by technology, the product does not meet the standards of modern day customers and this negatively impacts the revenue of businesses. In case of MSMEs, if the business is not able to generate sufficient revenues, it would not be able to grow. Thus, in today’s technology driven world where there are cutting-edge and developed products to suit customer preferences, a MSME business should be technologically driven if it were to survive in the cut-throat competition. Moreover, having technically advanced production system will make it more efficient and ensure cost associated is minimised.

Enabling the business with the latest technology proves financially difficult, especially for MSMEs which have limited access to capital. That is why to promote MSMEs to have state-of-the-art technological facilities the Government offers Credit Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradation. Here’s what the scheme offers –

What the scheme offers?

The Credit Linked Capital Subsidy Scheme offers a 15% capital subsidy to small scale industries. When MSMEs avail loans for technology upgradation, they can enjoy a subsidy on such loans. The salient features of the scheme are as follows –

  • The subsidy is available on loans of up to Rs 1 crore availed for modernising plant and machinery
  • The amount of capital subsidy is calculated on the cost of plant and machinery acquired by the business
  • SIDBI, NABARD and nine other public sector banks and Government Agencies act as nodal agencies which are tasked with the implementation of the scheme
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Who runs the scheme?

The Development Commissioner of the Ministry of MSME runs the scheme and the nodal agencies help in implementing the scheme.

Who can apply for the scheme?

Sole proprietorship businesses, partnership firms, public and private limited companies and co-operative societies which belong to the small scale industries are eligible to apply for the scheme. Preference is given to women entrepreneurs. MSME businesses should have a valid UAM number to be eligible to apply for the scheme. The businesses availing this scheme should upgrade their new or existing plant and machinery to the latest state-of-the-art equipment.

The eligible Primary Lending Institutions (PLIs) who are authorised to offer loans to MSMEs under the Credit Linked Capital Subsidy Scheme include scheduled commercial and cooperative banks, regional rural banks, state financial corporations and North Eastern Development Financial Institution.

How to apply for the scheme?

The scheme can be applied online as well as offline. For online application, MSMEs can apply through the official websites of primary lending institutions from where loan is availed. When applying for the loan from such lenders, MSMEs can opt for the scheme. The PLI would then process the application and forward it to any one of the nodal agencies. The nodal agency then forwards the application to the Development Commissioner of MSME who allows the subsidy. Once the subsidy is allowed, approval is given and funds are sent to the nodal agencies. The nodal agencies then transfer the funds to the PLI from where the loan was sought by the MSME.

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In Conclusion

MSMEs lose out on business when their products are not in tune with the latest technological advancements. Through the Credit Linked Capital Subsidy Scheme MSMEs can avail easy finance at affordable rates and build a modernised production line complete with technological advancements.





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