CLCSS – Full Form, New Scheme, Subsidy, Eligibility, Documents


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Clcss Scheme

Scheme Objective

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
  • Toys
  • 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
  • Locks
  • Cosmetics
  • Sports goods
  • Electronic equipment
  • Welding electrodes
  • Fans and the motor industry
  • General lights services
  • Stone industry
  • Dyes
  • Beneficiation of Graphite and Phosphate
  • Printing
  • Gold plating
  • Engineering works
  • Leather
  • 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 –, 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 –
  • 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:

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CLCSS Loan Scheme FAQs:

1. Who are the beneficiaries of the CLCSS Subsidy Scheme?

The beneficiaries are Private & Public Ltd. Companies in the SSI sector, Partnerships, Proprietorships, and Co-operative societies.

2. When was CLCSS launched, and is it still operational?

The Scheme was launched in the financial year 2000-2001. No, currently this scheme is not operational. As per this office, the CLCS Scheme was operational only till 31.03.2017; no application will be accepted through the online application process and the web tracking system beyond 31st March 2017. Whenever the decision is taken to continue the CLCSS scheme which extends beyond 31st March 2017, the same will be communicated to the concerned nodal banks and centres only after the Competent Authority approves of the same that is to extend the working of the CLCSS Scheme.

3. Is CLCSS applicable for medium and large-scale Enterprises?

No, as of now, CLCSS is only available for SSIs – Small Scale industries or all industries who have recently escalated or upgraded themselves from SSIs to Medium Scale Industries.

4. Who and How can one benefit from the CLCSS Scheme?

Suppose an SSI wants to upgrade the technology of manufacturing and other upgradations and technological updates as approved under the Scheme. In that case, the SSI can approach the Eligible financial institution for sanction of term loan for the purchase of eligible machinery. The financial institutions /will further recommend the same for CLCSS for updating and modernization.

5. Is CLCSS only for Rural People

CLCSS is applicable for SSIs in both urban and rural areas. It is applicable to all small-scale industries which want to grow technologically and get modernized updates and upgrades for their units.

6. Which Nodal Agencies oversee the distribution of subsidies under CLCSS?

The following Nodal Agencies oversee the distribution of subsidies: 1. SIDBI (Small Industries Development Bank of India) 2. NABARD (National Bank for Agriculture and Rural Development) 3. Indian Bank 4. Bank of India 5. State Bank of Bikaner and Jaipur 6. Bank of Baroda 7. Canara Bank 8. Corporation Bank 9. State Bank of India 10. Andhra Bank 11. Punjab National Bank 12. Tamilnadu Industrial Investment Corporation.

7. What is the current revised rate under CLCSS?

The current revised scheme is of Rs. 100 lakhs which is the maximum limit for an eligible loan in accordance with the subsidy limit which iseither 15 lakhs (minimum) or 15% of the total – whichever is lower.

8. What is passable working capital under CLCSS?

Success of CLCSS up-gradation scheme depends on theprocurement and the eligibility of passable working capital. Rigorous institutions need a formal guarantee that the enterprises who are borrowing have conducted satisfactory arrangements and preparations to procure the appropriate necessities of a passable working capital.

9. What are the consequences of CLCSS on Units availing subsidies?

The results are: • Under the prevailing laws, the chief loaning agency will estimate and charge them the fees, debtor’s security, and other factors. • Under CLCSS, units availing subsidy will not get the advantage of additional subsidy for technology up-gradation. • Units in the North-Eastern Region can get advantages from both the above conditions.

10. Can the lending agency set conditions to make sure the funds are used for optimal management?

Yes, the lending agency also has the right to revoke the sanction of funds of any false information is found regarding the applicant.

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