CLCSS
Credit Linked Capital Subsidy Scheme for Technology Upgradation
Flagship MSME scheme that provides 15% upfront capital subsidy on institutional finance for purchase of eligible plant and machinery, helping enterprises adopt modern technology and improve productivity.
Who Can Apply?
Micro & Small Enterprises
Existing and new micro and small enterprises (MSEs) engaged in eligible manufacturing sub-sectors can apply.
Approved Technologies / Sectors
Unit should upgrade or install plant and machinery covered under approved technology lists and notified sub-sectors.
Institutional Term Loan
Must avail a term loan from eligible banks / financial institutions specifically for technology upgradation or new eligible machinery.
Valid MSME Registration
Enterprise should have valid MSME/Udyam registration and comply with MSMED Act classification as micro or small.
Location & Segment
Units in rural, semi-urban and urban areas are eligible, subject to being in notified sectors and meeting scheme norms.
No Double Subsidy
Same machinery should not simultaneously claim capital subsidy from multiple overlapping schemes for the same component.
Key Features
15% Upfront Subsidy
Provides 15% capital subsidy on eligible term loan for approved machinery, directly reducing the effective project cost.
Technology Upgradation Focus
Encourages adoption of state-of-the-art or improved technology to modernise production, improve quality and reduce costs.
Defined Eligible Sectors
Covers a wide list of manufacturing sub-sectors such as textiles, food processing, engineering, coir, khadi and more as notified in guidelines.
Bank-Linked Implementation
Subsidy is linked to institutional term loans and routed through nodal agencies and primary lending institutions.
Lower Effective Financing Cost
By reducing the principal through subsidy, the overall interest burden and payback period for technology investments come down.
New & Existing Units
Supports both fresh MSEs setting up with approved technology and existing units undertaking technology upgradation.
Scheme Benefits
Application Process
Identify Eligible Technology & Bank
Confirm that your machinery and sector are covered under CLCSS lists and approach an eligible bank / financial institution for a term loan.
Prepare Project Report
Prepare a project report detailing current setup, proposed technology, machinery cost, funding pattern and projected benefits.
Loan Sanction & CLCSS Tagging
Apply for term loan; once sanctioned, request the bank to tag the proposal under CLCSS and initiate the online subsidy claim.
Online Subsidy Application & Release
Bank uploads the subsidy claim on the CLCSS portal; after approval and fund release to nodal agency, subsidy is credited to your loan account.
Documents Required
Frequently Asked Questions
What subsidy is available under CLCSS?
The scheme generally provides a 15% capital subsidy on eligible term loan for approved machinery, with a maximum subsidy of around ₹15 lakh for loan up to ₹1 crore.
Who can apply for the CLCSS subsidy?
Existing and new micro and small manufacturing enterprises in notified sub-sectors that are upgrading or installing eligible plant and machinery can apply via their bank.
Is CLCSS a loan or a grant?
CLCSS is a capital subsidy that reduces the effective cost of machinery; the term loan itself is still repayable to the bank as per normal terms.
How is the subsidy credited to the unit?
After the bank files and obtains approval for the subsidy claim, the released subsidy amount is credited to the enterprise’s loan account, reducing the outstanding principal.
Can service sector units apply under CLCSS?
The scheme primarily targets manufacturing MSEs and specified product lines; service units are usually not covered unless specifically listed in updated guidelines.
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