Credit Linked Capital Subsidy Scheme

These days technology has become such an important part of our living that we are relying on it for everything. Talking of which for small scale business epically the one in the manufacturing field, technology has become more like a need. To create the products that would meet the requirements and match the national standards, such small scale and medium scale companies work hard and invest more in the equipment and machinery. The overall price of such machinery is quite a lot and which is why it becomes difficult for the MSMEs to create the capital for investing in the equipment and technologies.  That is when the Credit Linked Capital Subsidy Scheme (clcss scheme) comes into action.

Know More About CLCSS

CLCSS is one efficient scheme whose complete name is Credit Linked Capital Subsidy Scheme. The ministry of Small and micro-enterprises has launched this innovative credit. Needless to say that its demand has been quite a lot over some time now. The primary goal of such a scheme is to offer the best technology upgrades that can help the small and micro companies especially the ones located in urban and rural areas. As we all can see there are so many small-scale companies that are still working with outdated technology, it is then clcss subsidy that can help in upgrading the machinery even when the funds are limited. It offers the capital subsidiary for the machinery bought.

CLCSS Key Features That You Cannot Ignore

With a scheme like CLCSS, the businesses can enjoy up to 15% of the subsidy as they invest in the machinery that fits the criteria.

  • The 15% of the subsidiary is available for those small and micro enterprises that have made their investment in the plant which is eligible and used the term loans that were taken from the list of pre-approved public lending institutions.
  • With the transformation of the industries taking place from small to medium scale because of the additional loans sanctioned under clcss subsidy status, such companies can be eligible even for the subsidy that too with a limit of Rs.1 crore
  • As per the revised credit linked capital subsidy scheme UPSC, the entrepreneurs can earn an additional 10% subsidy who are from the SC/ST category and have been shortlisted from certain districts of other hilly terrains.

How Does It Work?

  • There is no hard and fast working of this scheme. The scheme includes the plan where the individual can buy an affordable house and can even earn a better interest concession. This can go up to 4% of the total amount which has been borrowed.
  • The calculation of the subsidy is done according to the current price of the savings made on the interest of home loans as compared to the whole load tenure which has been marked at 2.35 lakh maximum.
  • The subsidy is thus then deducted from the borrower principal dues while minimizing the whole EMI amount which is payable.
  • To get the subsidy, the borrower must submit a self-declaration for the information along with the property title which needs to be given to the lender who shall verify all this information.
  • Even if banks can give quick credit to the borrower but the lender can get the subsidy amount only after the process of the claim is done by the nodal agency where the registration has been made.

Why Is It Important?

To have your own house is a dream of every individual. But with the property prices that seem to be spiking at quite a rate, it is keeping home not so easily affordable by the buyers. Considering the housing segment that is affordable and getting more traction from buyers and even the developers, it is the capital subsidy scheme that can be helpful. It helps to bridge up the gap between the availability in the market with that of the home buyer aspirants.

Since the real estate section has reeled down under quite a slowdown because of less demand and the inventories which are unsold to great expectations, the prices of the priorities are simply increasing. Developers are also coming up with more projects in less than 1 crore of segments. Last year there were only 40% of the projects launched in the affordable range. However, CLSS has got a subsidiary schedule that can be beneficial in this case.

Eligibility Criteria

Well for the small and micro businesses that fall under 51 sub-sectors stated by the MSME Mistry can apply for the capital subsidy.

  • The subsidy is for the new enterprises and the existing ones. Whether the business is micro or small, whether it is in an urban area or rural area, this subsidy is available for such companies.
  • The scheme is designed for those enterprises that have a valid UAM number. This can be a partnership, sole proprietorship, private limited companies, and even the tiny industries and village industries to name some.
  • In case you want to upgrade your industry or plant equipment, you can do so for which you need to fall under the eligibility criteria and available the 15% of the subsidy

Benefits Of The CLCSS

This clcss subsidy scheme is known to offer different advances to small-scale industries. This includes:

  • It offers a good technology up-gradation to those mid-size and small scale industries that belong to different products and sectors which MSME has categorized
  • The subsidy of 15% can be availed on the purchase made for the machinery and equipment to be used on the plant. This way the overall burden of the loan from such small and mid-size enterprises reduces.
  • It also contributes to rural industries growth which shall be able to manufacture high-quality products.

How To Apply For CLCSS

The process of applying to a special credit linked capital subsidy scheme was introduced in the year 2013. The beneficiaries who are eligible need to apply for the subsidy of CLCSS from the Primary Lending Institutions through which they have taken the loan.

The beneficiary will then have to fill up the form and then upload it to the online portal using clcss login credentials that have been set by the PLI.

The clcss online application which gets uploaded shall further be sent to the nodal agency that shall forward the application to the Office of DC (MSME).

Once the whole verification process is done, the DC office shall sanction the subsidy release while the Internal Finance Wing will offer the fund to the nodal agency for the beneficiary which further can be traced with clcss subsidy status tracking solution.

CLCSS Documents Required

Eligible micro and small industries must submit the following documents for availing of the CLCSS subsidy.

  • PAN card of the individual and the business
  • Aadhaar Card
  • Personal address proof
  • Business address proof
  • Recent passport size photographs
  • Proof of business
  • KYC documents


It is time that you take this job scheme quite seriously to grow in the market. You can certainly enjoy the subsidiaries that CLCSS offers and thus upgrade the equipment and machines of your plants. However, be sure of whether the CLCSS scheme covers primary lending institutions before you send your application. It is better to select the right lender for the small loan and be rest assured. It is time to fill up the clcss subsidy application today and focus on growing your business with better technologies without any kind of financial burden on yourself at all.

Questions and Answers

Q: So far, how many products have CLCSS approved?

A: Overall, CLCSS  has approved 51 products to date. This is the main reason why there are so many small and mid-scale businesses eager to opt for such a scheme. However, there is more scope of further addition.

Q: Can an Individual seriously benefit from the scheme?

A: Certainly if the person belongs to the MSE manufacturing sector that is one of the 51 categories and wishes to upgrade the machinery and technology using institutional finance, then it is possible through the scheme.

Q: What were the CLCSS features?

A: According to the scheme, the capital subsidy of 15% which is restricted to a maximum of 15 lakh shall be given to the small and micro enterprises so that technical is upgraded with improvement.

Q: Is the Scheme restricted to only 51 sub-sectors?

A: There are more sub-sectors, products, and even technologies that CLCSS can add. But it entirely depends on the requirement that industrial associates set in a certain format. Once the Technical subcommittee approves of it then the process can go further.

Q: Which Nodal Agencies are known for CLCSS implementation?

A: Canara Bank, State Bank of India, Punjab National Bank, Small Industries Development Bank, Andhra Bank, National Bank for Agriculture, and State Bank of Bikaner & Jaipur to name some are Nodal Agencies known for CLCSS implementation. However, there are more nominations in the process for such agencies.