What is the recently launched Credit linked Capital Subsidy Scheme (CLCSS) for MSMEs?

The Indian Government has decided to extend a special Credit Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradation to the MSMEs. This money is to be utilized for the Technology Upgradation. The Indian Government relaizes that the equipping a business with technology is fiscally draining and this problem is even more severe for the Micro, Small and Medium Enterprises (MSMEs) who lack access to capital.

Highlights of the scheme

  • The Credit Linked Capital Subsidy Scheme (CLSS) of the Indian Government offers a 15% capital subsidy to all small scale industries which avail this facility for technological upgradations.
  • The subsidy has been made available on all loans taken by MSMEs upto a total of INR 1 crore which can be used by the firm for modernizing plant and machinery.
  • The quantum of the total capital subsidy amount is ascertained by the Indian Government on the cost of plant and modern machinery which was acquired by the business.
  • The Indian Government has notified Small Industries Development Bank of India (SIDBI), National Bank for Agriculture and Rural Development (NABARD) and nine other public sector banks & Government Agencies to act as the nodal agencies. These bodies will be tasked with the implementation of the scheme.
  • The Development Commissioner of the Ministry of MSME has been made responsible to run the this scheme and assist the nodal agencies with its implementation.

Need for this scheme

Modern business and the MSMEs may lose out on the business and economic gain if their products are not modern or in tune with the latest technology. Hence, the Indian Government’s Credit Linked Capital Subsidy Scheme for  MSMEs provides them with an easy source of finance at very affordable rates and allows them to build up a modernized production & assembly line.


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