Credit Link Capital Subsidy Scheme for Technology Upgradation to Empower Entrepreneurs 

Credit Link Capital Subsidy Scheme for Technology Upgradation to Empower Entrepreneurs 

Credit Link Capital Subsidy Scheme for Technology Upgradation to Empower Entrepreneurs

Puja Bhardwaj | StartupCity Magazine

The Credit Linked Capital Subsidy Scheme(CLCSS) was initiated on 1st October 2000 to boost the competitiveness ofMSMEs. It is performed by blending continuous technological up gradationefforts with the Credit Linked Capital Subsidy (CLCS), hand-holding zero defectzero effect manufacturing (ZED), advancing the productivity by waste reduction,design intervention, cloud computing, facilitation of intellectual property,and nourishing unprecedented concepts.

Numerous specificprovisions have been introduced in this program to encourage entrepreneurshipfor SC, ST, women NER, Hill States, Island Territories, and the AspirationalDistricts. As per the rule, the subsidy shall be applicable also for financingin acquisition and replacement of plant and machinery and all kind oftechnology up-gradation. The scheme is going to be demand-driven though; itscoverage has been made more comprehensive.

CLCSS gives acapital subsidy of 15 percent on institutional finance availed by them for the inductionof well-established and improved technology.

Maximum limit ofeligible loan for calculation of subsidy under the Scheme is Rs.100.00 lakh.


Present-day, theScheme facilitates subsidy to 51 sub-sectors/products comprising Khadi andVillage Industries. As the Scheme advanced, the list of products/sub-sectorshas also been extended by enlisting modern technologies and products.


Today, the Schemehas been implemented by 12 nodal banks including SIDBI and NABARD. Except forthese financial institutions, all the banks would consider proposals only inrespect of credit approved by their respective branches.

Objective of CLCSS

  • The objective of the Scheme is to facilitatetechnological advancement in MSMEs by offering an upfront capital subsidy.
  • It also focuses on enhancing theirplant & machinery with state-of-the-art technology, with or withoutexpansion.
  • Credit Linked Capital Subsidy Schemebecomes the foundation for those MSEs which have set up their facilities withappropriate eligibility and proven technology duly approved under schemeguidelines.
  • The Scheme is entirely demand-drivewithout any upper limit on overall annual spending on the disbursal of the subsidy.

How to Apply

There is an online process to apply for thisscheme.

In order to claim subsidy under CLCSS, MSEsneed to apply online through Primary Lending Institutions (PLIs), from wherethey can avail term loan.

After the submission of application, thecompleted application is uploaded by the PLI through Online Application andTracking System to the associated Nodal Agency which, in turn, urges theapplication online to Office of DC (MSME) for releasing the subsidy.

Once application is processed, and it becomesthe subject to availability of funds, due approval is granted from theCompetent Authority with the concurrence of Internal Finance Wing, after whichfunds are allotted to Nodal Agencies.

 Fundsare then assigned by the Nodal Agencies to the PLIs where the account of theMSE is conducted.

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