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Credit Link Capital Subsidy Scheme for Technology Upgradation to Empower Entrepreneurs 


Credit Link Capital Subsidy Scheme for Technology Upgradation to Empower Entrepreneurs

Puja Bhardwaj | StartupCity Magazine

The Credit Linked Capital Subsidy Scheme (CLCSS) was initiated on 1st October 2000 to boost the competitiveness of MSMEs. It is performed by blending continuous technological up gradation efforts with the Credit Linked Capital Subsidy (CLCS), hand-holding zero defect zero effect manufacturing (ZED), advancing the productivity by waste reduction, design intervention, cloud computing, facilitation of intellectual property, and nourishing unprecedented concepts.

Numerous specific provisions have been introduced in this program to encourage entrepreneurship for SC, ST, women NER, Hill States, Island Territories, and the Aspirational Districts. As per the rule, the subsidy shall be applicable also for financing in acquisition and replacement of plant and machinery and all kind of technology up-gradation. The scheme is going to be demand-driven though; its coverage has been made more comprehensive.

CLCSS gives a capital subsidy of 15 percent on institutional finance availed by them for the induction of well-established and improved technology.

Maximum limit of eligible loan for calculation of subsidy under the Scheme is Rs.100.00 lakh.


Present-day, the Scheme facilitates subsidy to 51 sub-sectors/products comprising Khadi and Village Industries. As the Scheme advanced, the list of products/sub-sectors has also been extended by enlisting modern technologies and products.


Today, the Scheme has been implemented by 12 nodal banks including SIDBI and NABARD. Except for these financial institutions, all the banks would consider proposals only in respect of credit approved by their respective branches.

Objective of CLCSS

  • The objective of the Scheme is to facilitate technological advancement in MSMEs by offering an upfront capital subsidy.
  • It also focuses on enhancing their plant & machinery with state-of-the-art technology, with or without expansion.
  • Credit Linked Capital Subsidy Scheme becomes the foundation for those MSEs which have set up their facilities with appropriate eligibility and proven technology duly approved under scheme guidelines.
  • The Scheme is entirely demand-drive without any upper limit on overall annual spending on the disbursal of the subsidy.

How to Apply

There is an online process to apply for this scheme.

In order to claim subsidy under CLCSS, MSEs need to apply online through Primary Lending Institutions (PLIs), from where they can avail term loan.

After the submission of application, the completed application is uploaded by the PLI through Online Application and Tracking System to the associated Nodal Agency which, in turn, urges the application online to Office of DC (MSME) for releasing the subsidy.

Once application is processed, and it becomes the subject to availability of funds, due approval is granted from the Competent Authority with the concurrence of Internal Finance Wing, after which funds are allotted to Nodal Agencies.

 Funds are then assigned by the Nodal Agencies to the PLIs where the account of the MSE is conducted.