Credit Linked Capital Subsidy Scheme (CLCSS)

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CLCSS is a flagship initiative by the Government of India to promote technology upgradation among MSMEs. It helps small businesses modernise operations by providing a capital subsidy on loans taken for purchasing new machinery and equipment.

Highlights

  • CLCSS was launched by the Ministry of MSME in October 2000, implemented through SIDBI and other nodal agencies.
  • It offers 15% capital subsidy on new equipment, up to ₹15 lakh per unit.
  • The subsidy is available on loans up to ₹1 crore.
  • Applicable across 51+ notified sub-sectors, including food processing, textiles, rubber, leather, pharmaceuticals, and more

What is CLCSS?

  • The scheme provides financial assistance to MSMEs in the form of a capital subsidy.
  • Supports the purchase of state-of-the-art machinery for technology upgradation.
  • Makes MSMEs more competitive both domestically and globally.

Objectives

  • Promote adoption of modern, energy-efficient technologies
  • Improve product quality, cost-efficiency, and energy savings.
  • Support existing and new enterprises in technology upgradation
  • Reduce the financial burden of capital investments for eligible MSMEs.

Benefits of the CLCSS

  • Capital Subsidy
    You receive a 15% subsidy on eligible plant and machinery for technology upgradation.
  • Easy Loan
    Loans up to ₹1 crore are eligible for subsidy from recognized lending institutions.
  • Wide Sector Coverage
    Many industries benefit, including textiles, food processing, pharma, leather, biotech, plastics, and more.
  • Energy & Pollution Efficient Technology 
    CLCSS promotes the adoption of energy-saving and eco-friendly solutions.

Financial Assistance Under CLCSS

Assistance Type

Subsidy Percentage

Maximum Subsidy

Maximum Loan Amount

Capital Subsidy

15%

₹15 lakh

₹1 crore

Eligibility for CLCSS Scheme

You are eligible if:

  • You are a micro or small enterprise covered under the notified sub-sectors.
  • You have a valid Udyam Registration.
  • You are upgrading to approved energy-efficient or pollution-control technology machinery.
  • You have not availed similar subsidies from other schemes.

You are not eligible if:

  • You have already claimed the CLCSS subsidy for the same machinery or technology.
  • Your MSME is not registered or is incompletely registered on the Udyam portal.
  • You fail to meet documentation or compliance requirements.

Documents required for CLCSS

  • Aadhar Card
  • PAN card of the applicant and the company
  • Ration Card/ Voter ID
  • Proof of business
  • Recent passport-sized photographs

Application Process for CLCSS

You can apply:

  • Online through your bank’s digital platform or the official Nodal Agencies
  • Offline by visiting a designated bank or financial institution that handles CLCSS applications

Examples of Where the CLCSS Scheme Can Be Used

  • Upgrading equipment in a food processing unit for better efficiency.
  • Modernising machines in a textile unit.
  • Improving technology in a rubber processing factory.
  • Automating production in a coir product plant.
  • Introducing automation to a leather goods manufacturing unit.

Related Schemes

Prime Minister's Employment Generation Programme (PMEGP)

Prime Minister's Employment Generation Programme (PMEGP)

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Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

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Frequently Asked Questions

1. What is the limit of a credit linked capital subsidy scheme?

Under the CLCSS, eligible MSMEs can avail of a capital subsidy of 15% on the purchase of approved plant and machinery, with a maximum subsidy limit of Rs 15 lakh on loans up to Rs 1 crore.

2. What is the maximum subsidy available under CLCSS?

The maximum subsidy you can get is 15% of the eligible investment in plant and machinery, subject to a ceiling of Rs 15 lakh per unit.

3. Can the CLCSS subsidy be combined with other government subsidies?

Generally, the CLCSS subsidy cannot be combined with other Central or State Government subsidies for technology upgradation, unless specifically allowed under certain conditions.

4. How can I apply for the CLCSS subsidy?

MSMEs can apply through their lending bank or financial institution, which will process the loan and forward the subsidy claim to the nodal agency; applications can also be tracked online on the official portal.

Credit Linked Capital Subsidy Scheme for MSMEs - Bullit