January 16, 2023
Jasmine John

CLCSS Credit-Linked Capital Subsidy Scheme

The CLCSS Credit-Linked Capital Subsidy Scheme's goal is to assist technology upgradation in MSEs by offering a 15% upfront capital subsidy (on institutional funding of up to Rs 1 crore acquired by them) for the introduction of well-established and enhanced technology in the 51 recognized sub-sectors/products. In other words, the main goal is to modernize existing equipment and machinery with cutting-edge technology, with or without growth, and also for new MSEs that have established their facilities with acceptable eligible, and proven technology that has been officially certified under scheme rules. The Scheme is demand-driven, with no upper limit on total yearly spending on subsidy disbursement.

Nature Of Assistance

The revised scheme aims to promote technology advancement by providing a 15% up-front capital subsidy to MSEs, including tiny, khadi, village, and coir industrial units, on institutional finance obtained for the incorporation of well-established and improved technologies in specified sub-sectors/products accepted under the scheme.


The fundamental goals of this strategy may be summarised as the purpose to modernise firms' equipment and machinery using cutting-edge technology, regardless of size. In addition to current MSMEs, new firms established in accordance with CLCSS rules may be eligible for this plan.

The scheme attempts to achieve the following objectives:

1. MSMEs will benefit from technological advancements via equipment.

2. to provide the most recent improvements to MSME's plant and machinery

3. If necessary, to aid with growth

How To Apply for CLCSS Credit

With effect from October 1, 2013, an online application and tracking system have been implemented. To seek CLCSS subsidies, qualifying MSEs must apply online through Primary Lending Institutions (PLIs), from which they obtain term loans. The PLI uploads the completed application through the Electronically Application and Tracking System to the connected Nodal Agency, which then proposes the application online to the Office of DC (MSME) for subsidy disbursement. Following the processing of the application and subject to the availability of funds, the Competent Authority grants permission with the consent of the Internal Finance Wing, following which monies are given to Nodal Agencies. The funds are subsequently transmitted by the Nodal Agencies to the PLIs where the MSE's account is managed.

Features of CLCSS Credit

These are some of the most notable features of the CLCSS subsidy -

1. This plan allows businesses to earn up to a 15% subsidy on their investment in particular machinery.

2. It should be emphasized that the subsidy has a maximum ceiling of Rs.1 crore and is only available to businesses that have invested in machinery by taking out a term loan from an approved list of financial institutions.

3. This subsidy plan is also available to industries that are migrating from small to medium scale by obtaining a loan from the CLCSS.

4. The new CLSS plan provides an additional 10% subsidy to entrepreneurs that are SC/ST and come from certain areas of the North-East or other hilly terrains.

5. Credit-linked capital subsidy schemes are overseen by 12 nodal bodies. They are as follows:

6. Bank of India

7. State Bank of India

8. Indian bank

9. Bank of Baroda

10. Andhra Bank

11. Punjab National Bank

12. Corporation Bank

13. Canara Bank

14. State Bank of Bikaner and Jaipur

15. Tamil Nadu Industrial Investment Corporation Limited

16. Small Industries Development Bank of India or SIDBI

17. National Bank for Agriculture and Rural Development or NABARD


The following points emphasize the eligibility requirements for becoming a CLCSS recipient -

1. Small and micro-enterprises in the Ministry of MSME-specified sub-sectors would be considered eligible for this subsidy plan.

2. This plan provides subsidies to both new and current businesses.

3. Small and micro-enterprises with a valid UAM number in semi-urban and rural regions are also eligible.

4. Sole proprietorships, private limited corporations, minor industries, khadi, coir units, partnerships, village industries, and so on are common types of enterprises.

Required Documents for CLCSS Credit

Eligible entities must submit some documents to prove their eligibility and to begin the verification process -

1. Identity proof

2. Proof of business address 

3. Proof of applicants' addresses

4. Proof of Business

5. Applicant's and the firm's PAN card

6. Recent passport-sized photos

Aside from this, applicants may be needed to provide other KYC papers in order to be eligible for the Credit Linked Capital Subsidy Scheme.

How To Apply For CLCSS Credit?

By following these procedures, one can successfully apply for the CLCSS scheme -

Step 1: Apply through a banking institution on the list.

Step 2: Log in to MSME's official website using your User ID and password.

Step 3 - On the User Task menu, click the 'Apply for Subsidy' link.

Step 4 - Provide the essential information to proceed.

Step 5: Fill out the form with information about the machinery or equipment.

Step 6: Check the information you've provided and submit the form.

After submitting the form, it will be examined, and individuals will receive the application back for clarification. Following clarification, the application will be transferred to the nodal verification for loan sanction based on the applicant's eligibility, urgency level, and availability of funds.

Applicants can monitor the status of their applications online or by calling the appropriate nodal officer. Following approval, the funds are transferred to the authorized nodal agency and distributed to the financial institution where the applicant has an account.


The main goal of CLCSS is to modernize existing equipment and machinery with cutting-edge technology, with or without growth, and also for new MSEs that have established their facilities with acceptable eligible, and proven technology that has been officially certified under scheme rules. We also went through the eligibility criteria and the application process of CLCSS by which you can avail the same.


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