Credit Linked Capital Subsidy Scheme (CLCSS): Features, Benefits, and How to Apply

The Credit Linked Capital Subsidy Scheme (CLCSS) is a government initiative designed to enhance the competitiveness of small-scale industries. This scheme offers financial support to Micro, Small, and Medium Enterprises (MSMEs) for upgrading technology and machinery. With the goal of modernising India’s industrial sector, the scheme helps businesses access advanced tools and techniques, enabling them to produce quality goods efficiently.

This article will explain the nuances of the Credit Linked Capital Subsidy Scheme (CLCSS) and provide an overview for businesses looking to navigate the details of this essential scheme.

What is a Credit Linked Capital Subsidy Scheme (CLCSS)?

The Credit Linked Capital Subsidy Scheme (CLCSS) is a flagship initiative introduced by the Ministry of MSME. It aims to provide financial support to MSMEs located in rural and semi-urban areas for upgrading their technology and equipment. This scheme enables businesses to adopt state-of-the-art machinery, leading to improved production capabilities and competitiveness.

Key features of CLCSS:

• MSMEs can avail a capital subsidy of 15% on term loans availed for eligible machinery
• The subsidy is capped at Rs. 1 crore
• New and existing MSMEs that meet the CLCSS guidelines can benefit from the scheme
• The scheme supports technology upgrades without the need for business expansion

With such robust features, the CLCSS scheme empowers MSMEs to overcome financial barriers and adopt modern solutions to drive growth.

Objective of CLCSS

The CLCSS scheme focuses on improving the productivity and profitability of small-scale industries. It seeks to ensure that enterprises, particularly those in rural and semi-urban areas, can compete in a rapidly evolving market.

Key objectives of CLCSS:

• To provide MSMEs access to advanced technology and equipment
• To upgrade plants and machinery with the latest technological advancements
• To support enterprises in their expansion plans, if required

By achieving these objectives, the scheme fosters economic growth and strengthens the foundation of small-scale industries in India.

Features of the CLCSS

The Credit Linked Capital Subsidy Scheme offers several noteworthy benefits that cater to the unique needs of small-scale industries. Here are the salient features:

• Subsidy on eligible machinery: MSMEs can avail a 15% subsidy on eligible machinery purchases, with an upper limit of Rs. 1 crore
• Targeted beneficiaries: Enterprises transitioning from small to medium-scale, as well as those in remote areas, can benefit from the scheme
• Additional subsidies: Entrepreneurs from SC/ST categories or selected regions like the North-East can avail an extra 10% subsidy
• Nodal agencies: The scheme is managed by 12 nodal agencies, including the State Bank of India, Punjab National Bank, SIDBI, and NABARD

This comprehensive approach ensures that enterprises across diverse sectors can maximise the benefits of the CLCSS.

Documents required to avail credit linked capital subsidy scheme

To avail of the benefits of the CLCSS scheme, eligible entities must submit the necessary documents to facilitate verification and approval.

Required documents:

• Identity proof
• Business address proof
• Applicant’s address proof
• Proof of business establishment
• PAN card of the applicant and company
• Recent passport-sized photographs
• Additional KYC documents, if required

Ensuring all documentation is complete will streamline the approval process for applicants.

Eligibility criteria for CLCSS

The eligibility criteria for the Credit Linked Capital Subsidy Scheme are designed to cater to a broad range of industries. This ensures that small and micro-enterprises across diverse sectors can benefit from the scheme.

Eligibility highlights:

Enterprises in sub-sectors specified by the Ministry of MSME are eligible

Both new and existing MSMEs can apply

Enterprises in rural and semi-urban areas with a valid UAM number qualify

Eligible business types include sole proprietorships, private limited companies, partnerships, khadi units, coir units, and village industries

Approved sectors:

Sector	Sub-sector
Biotech industry	Common effluent treatment plant
Drugs and pharmaceuticals	Food processing
Rubber processing	Wires and cable industry
Dimensional stone industry	Leather and leather products
Agricultural implements	Coir and coir products
Gold plating and jewellery	Toys and steel furniture

The wide range of eligible sectors ensures that businesses across multiple domains can harness the benefits of the CLCSS scheme.

Rate of subsidy under CLCSS

The subsidy offered under the CLCSS scheme is instrumental in reducing the financial burden on MSMEs.

Subsidy details:

• MSMEs receive a 15% subsidy on the investment in eligible machinery
• The maximum subsidy is capped at Rs. 15 lakh for loans up to Rs. 1 crore
• Subsidies apply exclusively to projects where a term loan is sanctioned

This financial assistance enables businesses to upgrade their technology without incurring overwhelming costs.

How to apply for a loan under CLCSS?

Availing a loan under the CLCSS scheme is a straightforward process. Follow these steps to apply successfully:

Steps to apply:

• Apply through a listed financial institution
• Log in with your User ID and password on the MSME’s official website
• Select the ‘Apply for Subsidy’ option from the User Task menu
• Enter all necessary details in the application form
• Provide information about the machinery or equipment
• Verify the details and submit the form

Once the application is submitted, it undergoes a thorough review. Applicants can track their application status online or by contacting the nodal officer. Upon approval, the funds are disbursed directly to the applicant’s account.

Benefits of credit linked capital subsidy scheme

The Credit Linked Capital Subsidy Scheme offers numerous advantages to MSMEs. These benefits not only alleviate financial burdens but also foster industrial growth.

Key benefits:

• Enables MSMEs to adopt advanced production technologies
• Reduces the loan burden by subsidising the cost of machinery
• Promotes the expansion and growth of industries in rural and semi-urban areas
• Improves the quality and quantity of production

These benefits make the CLCSS scheme a valuable tool for empowering India’s small-scale industries.

Conclusion

The Credit Linked Capital Subsidy Scheme (CLCSS) is a significant initiative that empowers small-scale industries to achieve technological advancement. By addressing the financial barriers faced by MSMEs, this scheme helps businesses improve their production capabilities and competitiveness. Additionally, for enterprises seeking further financial support, the Bajaj Finserv Business Loan provides a reliable solution. With customised loans, quick approvals, and minimal documentation, Bajaj Finserv ensures businesses can focus on growth without financial constraints.

Take advantage of the CLCSS scheme and Bajaj Finserv’s business loans to achieve sustainable growth and success in today’s competitive market. Apply today to unlock your business’s potential!