The ministry of MSMEs has launched credit Linked Capital Subsidy Scheme – CLCSS – Micro, Small and Medium Enterprises to provide upfront capital and financial support subsidy to SSIs – Small Scale Industries in rural and urban areas. The main aim of CLCSS is to provide capital for the up-gradation of technology and production equipment that is being used by SSIs.
The priority of CLCSS is to promote these SSIs in every corner of the country to delve into deeper growth and development of their sector whether is it a khadi unit, handicraft unit, coir industrial units, or other small village ventures to be updated and modernized in their tools, techniques, and structures.
Benefits of CLCSS
Bringing many advantages to the SSI sectors, the main benefits of CLCSS are:
- As classified by the Government of India, 15% (up to Rs. 1 crore) of Capital Subsidy is provided by CLCSS to SSI units dealing in specified or sub-sector products, to invest in plant and machinery, tools and techniques, modern technology, and other amenities provided to upgrade small-scale businesses.
- This has improved the functioning of many non-productive and lifeless industries.
- This scheme extends benefits to both – new and existing SSIs
The following subsectors are a few examples which will be covered by this scheme (51 of them):
- Drugs and Medicines – Pharmaceuticals
- Electrical Accessories
- Mineral water
- Glass and Ceramic accessories
- Medicinal and Aromatic Plants
- Mineral sheaths
- Biotech industries
- Steel furniture
- Wooden Furniture
- Other control and supervision accessories
- Communication tools
- Information Technology – Hardware
- Food processing
- Garments – readymade
- Steel and iron foundries
- Nonferrous foundries
- Hand tools and forging
- Plastic components
- Wires and cables
- Auto parts
- Combustion appliances
- Rubber processing
- Steel Re-rolling and Pencil ingot making sector
- Khadi and village sector
- Sewing machines
- Machine tools
- Agricultural equipment
- Pant and other varnishing products
- Sports goods
- Electronic equipment
- Welding electrodes
- Fans and the motor industry
- General lights services
- Stone industry
- Beneficiation of Graphite and Phosphate
- Gold plating
- Engineering works
- Coir products
- Zinc sulfate
- Poultry equipment
- Bicycle parts
- Industrial gases.
Subsidy Schemes of CLCSS
- ZED – Zero Defect Zero Effect Scheme: This subsidy scheme under CLCSS is to ensure that there is appropriate awareness amongst the MSMEs about the ZED manufacturing, scrutiny, analysis and monitoring procedures wherein the scope of improving efficiency and substantial use of tools and production-related machinery is adopted. This scheme is to reduce wastages substantially, increase productivity, expand the market, develop new products and processes, etc. The main objectives of this scheme are to drive manufacturing with environmentally friendly outputs & ZED production process, upgrade the production to quality standards and for the MSMEs to adopt energy-efficient manufacturing and promote quality system tools.
- Support for Entrepreneurial and Managerial Development of MSMEs through Incubators – This scheme caters to support the creativity and initiatives taken by everyone to promote them to adopt the latest technologies in innovative MSMEs and manufacturing. This also enables them to design, strategize, and execute the business with technology playing an integral part in business development.
- Digital MSME – This enables MSMEs for using Cloud-Based and to make them digitally empowered, considering the diverse digital needs of the sector.
- IPR – Intellectual Property Rights – This helps in boosting the innovation ecosystem in the competitive business environment, which has a direct impact on the sustainable economic growth and global standards in the technology space of the country.
- Lean Manufacturing – This helps in resolving the challenges of competitiveness and survival to all the constituents of the economy. It helps in reducing costs and increasing productivity and competitiveness.
- Design – This is to enable the Indian manufacturing sector and the Design fraternity with advice on expert matters and providing solutions that are cost-effective on issues related to designing. This leads to consistent improvement and value- add processes for existing and new products.
- CLCSS Scheme for Technology Upgradation – The main goal of this scheme is to enable MSMEs (having a valid UAM Number) to upgrade their technology by facilitating them with a capital subsidy of 15% up to Rs. 1 crore. It is completely driven by demand which also has no maximum limit of overall spending of the subsidy in a year. The following is included in the upgradation profile:
- There are 51 sub-sectors and products that have been approved as well as established products of technology. List available on its official website.
- Upgrading to state-pf the art technology
- Updating Plant and Machinery
- For new and existing MSMEs.
To apply for this scheme – https://clcss.dcmsme.gov.in/, the MSMEs need to apply online, the way they can apply for term loans, through PLIs. The duly filled application is then forwarded by the PLIs to the Nodal Agency which in turn, after thorough verification and approval, will further send it to the DC office (MSME Level) for releasing the subsidy.
After approval, The Competent Authority releases funds to the Nodal Agencies which are transferred to the accounts of the MSE through PLIs.
Performance of this scheme:
Number of MSE Beneficiaries
Amount of Subsidy released (Rs. In Crores)
2001 – 2012
How to apply for CLCSS?
The following steps need to be followed to apply for CLCSS:
- The applicant needs to apply through the Primary Lending Institution and the application is uploaded by the PLI to MSME for release of funds – https://my.msme.gov.in/mymsme/reg/COM_ClcssAppForm.aspx
- Then the applicant needs to login using username and password on the MSME website
- Then the applicant needs to click on the “Apply for Subsidy” link on the left side.
- Then he needs to fill the application form carefully.
- The applicant can also add Equipment or Machinery, and their respective prices
- The form can be later edited or modified if required.
- It will further be verified and approved by the Nodal office
- Finally, after approval, funds will be transferred to the nodal agencies in which the primary account exists.
Eligibility of CLCSS:
- As classified by the Government of India, 15% (up to Rs. 1 crore) of Capital Subsidy is provided by CLCSS to SSI units dealing in specified or sub-sector products, to invest in plant and machinery, tools and techniques, modern technology and other amenities provided to upgrade the small-scale business.
- This is available for projects in which the PLI has already sanctioned term loans
- Any industry that has upgraded from Small Scale to Medium Scale
- This is not linked to any refinance scheme for the nodal agency.
- Labor-intensive and export-oriented sectors will be considered for the same.
Documents Required for CLCSS:
CLCSS Loan Scheme FAQs:
1. Who are the beneficiaries of the CLCSS Subsidy Scheme?
2. When was CLCSS launched, and is it still operational?
3. Is CLCSS applicable for medium and large-scale Enterprises?
4. Who and How can one benefit from the CLCSS Scheme?
5. Is CLCSS only for Rural People
6. Which Nodal Agencies oversee the distribution of subsidies under CLCSS?
7. What is the current revised rate under CLCSS?
8. What is passable working capital under CLCSS?
9. What are the consequences of CLCSS on Units availing subsidies?
10. Can the lending agency set conditions to make sure the funds are used for optimal management?