
What is a Credit Linked Capital Subsidy Scheme?
MSMEs in India are often forced to work with obsolete technology due to a shortage of funds. However, this innovative credit scheme functions to help MSMEs located in rural and semi-urban areas improve their existing technology and equipment.
CLCSS was introduced by the Ministry of Micro, Small and Medium Enterprises to boost production of small scale industries by providing them access to subsidised capital. Under this scheme, eligible enterprises can enjoy a capital subsidy of 15% on loan availed from a financial institution.
The primary objectives of this scheme can be described as the intention to upgrade the plant and machinery of enterprises with state-of-art technology, irrespective of expansion. Besides existing MSMEs, new enterprises which have set up as per CLCSS guidelines can qualify as beneficiaries of this scheme.
Objectives
- The scheme aims at accomplishing the following goals
- To give technology advances through equipment to MSMEs
- Tp Upgrade MSME’s plant and machinery with the most recent enhancements
- To assist in expansion if needed
Features of CLCSS
These are among the most noteworthy characteristics of CLCSS subsidy –
- Businesses can receive up to 15% subsidy on their investment in specific machinery under this scheme. It must be noted that the subsidy comes with an upper limit of Rs.1 crore.
- CLCSS scheme is available to those enterprises which have put their money in machinery by availing a term loan from the approved list of financial institutions.
- Industries that are transitioning from small to medium scale by availing loan under CLCSS are also entitled to benefit from this subsidy scheme.
- According to the revised CLSS scheme, an extra 10% subsidy is extended to entrepreneurs who belong to the SC/ST category and hail from the selected districts of the North-East or other hilly terrains.
- 12 nodal agencies oversee Credit Linked Capital Subsidy Schemes. They are –
- Bank of India
- State Bank of India
- Indian bank
- Bank of Baroda
- Andhra Bank
- Punjab National Bank
- Corporation Bank
- Canara Bank
- State Bank of Bikaner and Jaipur
- Tamil Nadu Industrial Investment Corporation Limited
- Small Industries Development Bank of India or SIDBI
- National Bank for Agriculture and Rural Development or NABARD

Documents Required to Avail Credit Linked Capital Subsidy Scheme
Eligible entities are required to submit a set of documents to back up their eligibility and also to initiate the verification process –
- Identity proof
- Proof of business address
- Address proof of applicants
- Proof of business
- PAN card of the applicant and company in question
- Recent passport size photographs