CLCSS – Scheme, Eligibility, Benefits & Beneficiaries

Credit Linked Capital Subsidy Scheme (CLCSS) is a subsidy scheme launched under The Ministry of Micro, Small and Medium Enterprises (M/o MSME) for the technology up-gradation of Micro and Small Enterprises (MSEs) under approved and specified 51 sub-sectors/products. The primary focus of Credit Linked Capital Subsidy Scheme is to provide growth and development of Small Scale Industries (SSI) in rural and urban areas of India.

 

Large percentage of Small Scale Industry (SSI) units still work with outdated technology and plant and machinery. The Scheme aims at helping technology up-gradation by providing upfront capital subsidy to SSI units, including tiny units, Khadi units, village units and coir industrial units. The capital subsidy is provided to SSIs for the modernization of their production equipment (plant and machinery) and techniques.

Eligibility Criteria to avail loans under CLCSS

• The capital subsidy of 15% rate in eligible plant and machinery under the scheme shall be available only for projects, where term loans have been sanctioned by the eligible PLI on finance up to Rs. 1 crore
• Micro and Small Enterprises having a valid Udyog Aadhaar Memorandum (UAM) number are eligible
• The industries which are upgrading from small scale to medium-scale on account of sanction of additional loans under CLCSS are eligible for assistance
• Eligibility for capital subsidy under the scheme is not linked to any refinance scheme for the nodal agencies
• Export-oriented and labour intensive new sectors/activities will be considered under this scheme

Benefits of CLCSS

This scheme brought many advantages to Small Scale Industries (SSIs). These benefits are as follows:

• The main objective is to help in up-gradation of technology in Tiny and SSI units in the specified products / Sub-sectors as notified by Govt. of India by providing 15% capital subsidy for investment up to Rs 1 crore in eligible plant and machinery
• By introducing this scheme, many non-productive industries were improved
• Both the existing SSI Units and New SSI units which are registered are covered in this scheme
• The scheme would cover the following technology / needs / products / sub-sectors:

List of Approved Sub-sectors/ Products

1. Drugs and Pharmaceuticals	13.Mineral Water Bottle	25.Transformer/ Electrical Stampings/ Laminations /Coils/Chokes including Solenoid coils	37. Industry based on Medicinal and Aromatic plants
2. Glass and Ceramic items including tiles	14. Toys	26. Mineral Filled Sheathed Heating Elements	38. Glass and Ceramic Items, including tiles
3. Biotech Industry	15. Steel Furniture	27.  Control; Analytical, Medical, Electronic Consumer & Communication equipment, etc.	39. Information Technology (Hardware)
4. Food Processing (including Ice Cream manufacturing)	16. Readymade Garments	28. Forging & Hand Tools xxvi) Foundries – Steel and Cast Iron	40. Plastic Moulded/ Extruded Products and Parts/ Components
5. Wooden Furniture	17. Wires & Cable Industry xxii) Auto Parts and Components	29. Combustion Devices/ Appliances	41. Non-Ferrous Foundry
6. Rubber Processing including Cycle/ Rickshaw Tyres	18. Steel Re-rolling and /or Pencil Ingot making Industries	30. Khadi and Village Industries	42. Sewing Machine Industry
7. Machine Tool	19.  Agricultural Implements and Post-Harvest Equipment	31. Paints, Varnishes, Alkyds and Alkyd products	43.Locks
8. Cosmetics	20. Sport Goods	32. Electronic equipment via test, measuring and assembly/ manufacturing, Industrial process	44. Welding Electrodes
9. Fans & Motors Industry	21 Agricultural Implements and Post-Harvest Equipment	33. General Light Service(GLS) lamps	45. Dimensional Stone Industry (excluding Quarrying and Mining)
10. Dyes and Intermediates	22. Beneficiation of Graphite and Phosphate	34. Common Effluent Treatment Plant	46. Corrugated Boxes
11. Printing Industry	23. General Engineering Works xxviii) Gold Plating and Jewellery	35. Leather and Leather Products including Footwear and Garments	47. Coir and Coir Products
12. Zinc Sulphate	24. Poultry Hatchery & Cattle Feed Industry	36. Bicycle Parts	48. Industrial Gases

Comparison of Interest Rates on Business Loan Offered by Top Banks/NBFCs in 2023

Bank/NBFCs	Interest Rate
Axis Bank	10.75% p.a. onwards
Flexiloans	1% per month onwards
HDB Financial Services Ltd.	8% - 26% p.a.
HDFC Bank	10.75% - 25% p.a.
IDFC First Bank	10.50% p.a. onwards
Indifi	1.50% per month onwards
Kotak Mahindra Bank	16% - 26% p.a.
Lendingkart	12% - 27% p.a.
Mcapital	2% per month onwards
NeoGrowth Finance	15% - 40% p.a.
Tata Capital	12% p.a. onwards
UGRO Capital	9% - 36% p.a.
Bajaj Finserv	10% to 26%

Documents required

• Aadhar card / Voter ID / PAN card
• KYC documents of the applicant
• Business address and vintage proofs
• Any other document required by the lender

List of Beneficiaries (CLCSS)

• Andhra Bank
• Bank of Baroda
• Bank of India
• Canara Bank
• Corporation Bank
• Indian Bank
• NABARD
• Punjab National Bank
• SIDBI
• State Bank of India
• Tamil Nadu Industrial Investment Corporation

Claim Subsidy under CLCSS

To avail or claim a subsidy under CLCSS, you need to apply online via Primary Lending Institutions (PLIs) from where the Micro and Small Enterprises (MSEs) avail term loans.

Total CLCSS Units: 87,989

Progress Report: 2021-22 

Financial Year: 2021-22

• Total Number of Units: 1800
• Total Subsidy (Rs. in Crore): 106.63

Source: https://dashboard.msme.gov.in/  

FAQs

Q. Is this scheme only for rural people?
Ans. This scheme is for the technological advancement of small-scale industries both in rural and urban areas.

Q. Who are the beneficiaries of this subsidy scheme?
Ans. The eligible beneficiaries for this scheme are Private and Public Limited Companies in the SSI sector, Cooperative societies, Partnerships, and Proprietorships.

Q. What is the maximum subsidy offered under CLCSS? 
Ans. The ceiling on the subsidy would be Rs. 15 lakh or 15% of the investment in eligible plants and machinery, whichever is lower.

Q. I’m currently availing State government provided technology up-gradation subsidy, can I apply for this?
Ans. No, the Subsidy under CLCSS shall not avail any other subsidy for technology up-gradation from the Central/State/UT Government.  Except Cases covered under National Equity Fund (NEF) Scheme and Units in the North-Eastern region are eligible under CLCSS can also be covered under this scheme.

Q. I have wooden furniture business from last year which I want to expand, I already have can I apply under this scheme?
Ans. Yes, any beneficiary unit shall remain in commercial production for a period of at least 3 years.