Credit Linked Capital Subsidy Scheme


To facilitate Technology Upgradation of Tiny and SSI units in the specified products/sub-sectors as notified by Govt. of India by providing 15% capital subsidy for induction of proven technologies approved under the scheme.

About the Scheme

The Scheme aims at facilitating technology up-gradation by providing 15 per cent upfront capital subsidy up to a maximum cap of ₹ 15.00 lakhs (i.e., maximum investment in approved machinery is ₹ 1.00 crore) to MSE units including tiny, khadi, village and coir industrial units on institutional finance availed by them for induction of state-of-the-art or near state-of-the-art technology for up-gradation of the present technology level to a substantially higher one involving improved productivity, and/or improvement in quality of product and/or improved environmental condition including work environment. It would also include installation of improved packaging technique as well as anti-pollution measures, energy conservation machinery, in-house testing and on-line quality control.

Definition of Technology Upgradation

  • Technology upgradation would ordinarily mean induction of state-of-the-art or near state-ofthe-art technology. In the varying mosaic of technology obtaining in more than 7500 products in the Indian small scale sector, technology upgradation would mean a significant step up from the present technology level to a substantially higher one involving improved productivity, and/or improvement in the quality of products and/or improved environmental conditions including work environment for the unit. It would also include installation of improved packaging techniques as well as anti-pollution measures and energy conservation machinery. Further, the units in need of introducing facilities for in-house testing and on-line quality control would qualify for assistance, as the same is a case of technology upgradation.
  • Replacement of existing equipment/technology with the same equipment/technology will not qualify for subsidy under this scheme, nor would the scheme be applicable to units upgrading with second hand machinery

What’s Available

  • Financial assistance for availing credit and loan
  • 15% or Rs. 15/- Lakhs, whichever is lower (Subsidy is calculated regarding the purchase price of eligible Plant and Machinery approved under the scheme)

Loans Available at

  • State Bank of India
  • Canara Bank
  • Bank of Baroda
  • Punjab National Bank
  • Bank of India
  • Andhra Bank
  • State Bank of Bikaner & Jaipur
  • Tamil Nadu Industrial Investment Corporation
  • National Small Industries Corporation Ltd

Eligibility Criteria

  • Capital subsidy at the revised rate of 15 per cent of the eligible investment in plant and machinery under the Scheme shall be available only for such projects, where terms loans have been sanctioned by the eligible PLI on or after September 29, 2005.Machinery purchased under Hire Purchase Scheme of the NSIC are also eligible for subsidy under this Scheme
  • Industry graduating from small scale to medium scale on account of sanction of additional loan under CLCSS shall be eligible for assistance
  • Eligibility for capital subsidy under the Scheme is not linked to any refinance Scheme of the Nodal Agency (ies). Hence, it is not necessary that the PLI will have to seek refinance in respect of the term loans sanctioned by them from any of the refinancing Nodal Agencies
  • Labour intensive and/or export oriented new sectors/ activities will be considered for inclusion under the scheme

Application Process

  • Bank sanctions term loan to SSI Unit
  • Bank will enter into General Agreement (GA) with concerned SSI unit on behalf of Government of India
  • SSI Unit submits application for assistance under the CLCSS as per required format
  • Bank (Nodal Agency) approves CLCSS subsidy for SSI unit as per CLCSS regulation
  • Bank release the subsidy amount with each instalment of loan in a manner proportionate to the amount of term loan disbursed (on pro- rata basis), subject to the ceiling of the term loan/ subsidy amount as per applicable guidelines of the CLCSS
  • Subsidy amount once issued, is kept in Fixed Deposit for 3 years. The beneficiary unit shall remain in commercial production for at least three years after installation of eligible plant & machinery on which subsidy under CLCSS has been availed. If the unit fulfils the condition, the FD will be transferred to unit’s account after three years
  • Click here for the application form

Documentation Required

  • Copy of SSI Registration Certificate
  • Copy of Term Loan Sanction Letter
  • Copy of Bank Term Loan Statement of account showing release dates
  • Copy of machinery invoice(s) with the bill of entry (imports)
  • Audited Balance Sheet for the last 3 years prior to loan sanctions, or copy of project report submitted to bank
  • Company letter head – 6 Number
  • Stamp Paper – Rs. 200/- in the name of the unit
  • Owner’s Details: Name of proprietor / partner / Directors of Company. Their age, father’s / spouse’s name, residential address. Date of installation of each machine and date of put to commercial use. Increase in Capacity after installation of Machinery – Monthly – Profit and Loss, Sales etc

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