The Ministry of Micro, Small, and Medium Enterprises (MoMSME) introduced the Credit Linked Capital Subsidy Scheme (CLCSS) in the financial year 2000-2001 to facilitate the Micro and Small Enterprises (MSEs) located in rural and semi-urban areas for upgrading their technology.
A component of the Credit Linked Capital Subsidy and Technology Upgradation Scheme (CLCS-TUS), CLCSS offers an upfront subsidy of 15 percent on institutional finance of up to INR 1 crore (i.e. a maximum of INR 15 lakh) availed by the MSEs for upgrading plant, equipment, and machinery. The subsidy is provided only for the approved 51 sub-sectors and products by the MoMSME.
CLCSS Eligible Machinery List (Including Products/Sub-sectors)
|Biotech Industry||Common Effluent Treatment Plant||Corrugated Boxes||Drugs and Pharmaceuticals|
|Dyes and Intermediates||Industry based on Medicinal and Aromatic plants||Plastic Moulded/ Extruded Products and Parts/ Components||Rubber Processing including Cycle/ Rickshaw Tyres|
|Food Processing (including Ice Cream manufacturing)||Poultry Hatchery and Cattle Feed Industry||Dimensional Stone Industry (excluding Quarrying and Mining)||Glass and Ceramic Items including Tiles|
|Leather and Leather Products including Footwear and Garments||Electronic equipment viz test, measuring and assembly/ manufacturing, Industrial process control; Analytical, Medical, Electronic Consumer & Communication equipment etc.||Fans and Motors Industry||General Light Service (GLS) lamps|
|Information Technology (Hardware)||Mineral Filled Sheathed Heating Elements||Transformer/ Electrical Stampings/ Laminations/Coils/Chokes including Solenoid coils||Wires and Cable Industry|
|Auto Parts and Components||Bicycle Parts||Combustion Devices/ Appliances||Forging and Hand Tools|
|Foundries – Steel and Cast Iron||General Engineering Works||Gold Plating and Jewellery||Locks|
|Steel Furniture||Toys||Non-Ferrous Foundry||Sports Goods|
|Cosmetics||Readymade Garments||Wooden Furniture||Mineral Water Bottle|
|Paints, Varnishes, Alkyds and Alkyd products||Agricultural Implements and Post Harvest Equipment||Beneficiation of Graphite and Phosphate||Khadi and Village Industries|
|Coir and Coir Products||Steel Rerolling and/or Pencil Ingot making Industries||Zinc Sulphate||Welding Electrodes|
|Sewing Machine Industry||–||–||–|
Credit Linked Capital Subsidy Scheme Eligibility
The eligibility criteria to apply for subsidy under CLCSS are listed below.
- Applicant MSEs must have a valid Udyog Aadhaar Memorandum (UAM) number.
- A capital subsidy of 15 percent would be provided only for projects approved under the CLCSS.
- The capital subsidy would be provided only to projects for which term loans have been sanctioned by any Primary Lending Institutions (PLI) on or after 29th September 2005.
- Both existing projects or new projects of the approved industry are eligible.
- Machinery purchased under the Hire Purchase Scheme of the National Small Industries Corporation (NSIC) are also eligible for subsidy.
- Small scale industries that would be promoted to medium scale industries due to the sanction of the additional loan under CLCSS are eligible for assistance.
- Labour or/and export intensive new sectors or activities are also eligible for the subsidy.
- Primary Lending Institutions (PLI) do not have to seek to refinance from the Nodal Agencies for the sanctioned term loans as CLCSS is not linked to any refinance scheme of the Nodal Agencies.
Eligible Business Categories
- Women Entrepreneurs
- Sole Proprietorships
- Cooperative Societies
- Private Limited Companies (SSI sector)
- Public Limited Companies (SSI sector)
Note: Priority would be given to women entrepreneurs.
Nodal Agencies for CLCSS
- National Bank for Agriculture and Rural Development (NABARD)
- Small Industries Development Bank of India (SIDBI)
- State Bank of India
- Canara Bank
- Bank of Baroda
- Punjab National Bank
- Bank of India
- Andhra Bank
- State Bank of Bikaner & Jaipur
- Tamil Nadu Industrial Investment Corporation
Eligible Primary Lending Institutions (PLIs) for CLCSS
- Scheduled Commercial Banks (SCBs)
- Scheduled Co-operative Banks
- Regional Rural Banks (RRBs)
- State Finance Corporations (SFCs)
- North Eastern Development Financial Institution (NEDFi)
The PLIs are eligible as a lender under CLCSS only after executing a General Agreement (GA) with any nodal agencies.
How to Apply for Subsidy Under CLCSS?
Applicant MSEs can apply for subsidy under CLCSS both online and offline. The Online Application and Tracking System was introduced in 2013 for a hassle-free application process.
Once the application is submitted either online through the official website of the selected PLI or offline by visiting any branch of the PLI, the PLI sends the application to the MoMSME through the Nodal Agencies for releasing the subsidy. After the ministry verifies the documents, the funds are released to the Nodal Agency, which then transfers to the PLI.
Documents Required to Apply for CLCSS
- Application form
- Business proof: Certificate of practice, GST registration and filing documents, Partnership deed, MOA & AOA, Shop Act licence
- KYC documents: Passport, PAN card, Aadhar card, Voter’s ID card, Driving licence, Electricity bills, Telephone bills or Water bills, etc.
- Recent passport size photograph
- Any other documents instructed by the lending institution.
Benefits of Credit Linked Capital Subsidy Scheme
Here are a few benefits of the CLCSS.
- Provide MSEs with an opportunity to upgrade their equipment, plant, and machinery.
- Help MSEs to manufacture high-quality products in large numbers.
- Promote industrialisation in rural and semi-urban areas.
- Reduces the loan burden of MSEs by providing subsidies.
Credit Linked Capital Subsidy Scheme (CLCSS) At a Glance
According to the official website of the Development Commissioner, Ministry of Micro, Small & Medium Enterprises (MSME), the scheme was enforced till 31st March 2020. And in the financial year 2018-2019, MoMSME successfully disbursed INR 980.33 crore to the 14,155 MSEs.
Frequently Asked Questions
CLCSS was enforced till 31st March 2020, and after that, the Ministry of Micro, Small, and Medium Enterprises has not launched any new scheme under CLCSS.
There is no lock-in period for CLCSS. However, the PLI has to keep the subsidy in the form of Term Deposit Receipt (TDR) for three years after release by MoMSME.
You can check the status of your CLCSS subsidy by visiting the official website of the Development Commissioner, Ministry of Micro, Small & Medium Enterprises (MSME).