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Abstract Credit Linked Capital Subsidy Scheme facilitates the technological up gradation of MSE’s by providing capital subsidy of 15 percent (on institutional finance of up to Rs 1 crore availed by them) for introducing sophisticated technology in the approved 51 subsectors/ products. Its main intention is to upgrade the plant and machinery with latest technology of existing units and also for newly set up MSEs. The scheme is based on demand without any upper limit on overall annual spending on the subsidy disbursal.
Micro, Small and Medium Enterprises (MSME) sectors are the primary chains of economic growth and development of the Indian economy.It is a vibrant sector which carries on the proud legacy of India’s freedom movement. It provides immense employment opportunities at a lesser cost than large industries. It plays a significant role in strengthening rural and backward areas.It helps in reducing concentration of economic power and wealth. This sector contributes to the socio-economic development of the country. It caters to the need of the small entrepreneurs with low capital and thus helps in the overall empowerment of the people. Due to insufficient capital and widespread unawareness micro and small enterprises were carrying out operations with outdated technology. It was indeed difficult for these enterprises to keep up with global standards and face competition. Thus their survival mainly depended on modernisation and technological up gradation. In the light of these events, credit-linked capital subsidy scheme was introduced. In the 2018 Central Government budget, special focus was laid on reviving and strengthening the credit-linked capital subsidy scheme.
Secondary data pertaining to the research article has been obtained from online websites and journals.
This scheme was introduced in launched in October-2000 and revised from 29.9.2005. Maximum limit of eligible loan for calculation of subsidy under the scheme is Rs.100 lakhs. Presently, more than 1500 well established/improved technologies under 51 sub-sectors have been approved under the Scheme.
The objective of this scheme is to facilitate the technological up gradation of MSE’s by providing a capital subsidy of 15 percent (on institutional finance of up to Rs 1 crore availed by them) for introducing sophisticated technology in the approved 51 subsectors/ products. Its main intention is to upgrade the plant and machinery with the latest technology of existing units and also for newly set up MSEs. The scheme is based on demand without any upper limit on overall annual spending on the subsidy disbursal.The revised scheme provides 15% upfront capital subsidy to MSEs, including tiny, khadi, village and coir industrial units, on institutional finance availed by them for induction of well established and improved technologies in specified sub-sectors/products approved under the scheme.
Only micro and small enterprises with a Udyog Aadhaar Memorandum (UAM) number can benefit from this scheme.
The scheme is currently scheduled to be in operation up to March 31, 2007or till the time sanctions of aggregate capital subsidy disbursed by the Nodal Agencies reaches Rs.600 crore, whichever is earlier. SALIENT FEATURES The Credit Linked Capital Subsidy Scheme (CLCSS) was launched on 1st October, 2000. The Cabinet Committee on Economic Affairs (CCEA) has approved the changes in ceiling of credit from 40.00 lakhs to 1.00 crore with the rate of subsidy enhanced from 12% to 15% with effect from 29th September, 2005. SCOPE Currently, the scheme provides subsidy to only 51 sub-sectors/products including Khadi and Village Industries. But as the scheme expanded, a new list of products/sub-sectors has been included by installing new technologies/products/sub-sectors with the approval of the Technical Sub-Committee (TSC) and Governing and Technology Approval Board (GTAB) of the CLCSS.
The scheme would cover the following technology needs / products/ sub sectors:
This Scheme is linked with term loans availed by the MSEs from Banks or Financial Institutions.
Presenting, 12 nodal banks/agencies including SIDBI and NABARD are implementing this scheme. All the other nodal banks/agencies will only accept proposals in respect of credit approved by their respective branches.SIDBI and NABARD are responsible for the release of subsidy.SME units can claim subsidy through online application and tracking system which has been introduced from 01.10.2013.Subsidy claim application must be uploaded through Primary Lending Institutions (PLI). PERFORMANCE Performance of Credit Linked Capital Subsidy Scheme (CLCSS) from the inception (2001-02) upto 2016-17 is given below: Year No. of MSE Beneficiaries Total Amount of subsidy released (Rs. Crore) 2001-02 to 2011-12 16295 854.05 2012-13 5713 343.79 2013-14 6279 421.48 2014-15 7246 448.85 2015-16 5047 322.44 2016-17 4011 256.53 2017-18 (Upto 30.09.2017) 4027 257.39 Source: A diagrammatic representation of the flow of the scheme is given below:- Fig: Secondary Data.
The credit-linked capital subsidy scheme (CLCSS) has helped in the technological up gradation of Micro and Small Enterprises (MSEs) and also in installing state of the art technology in such units. Efforts are being made to reintroduce this scheme with much vigor to uplift the micro and small enterprises as they form the backbone of the economy. This scheme helped the MSEs to stand at par with global standards and sophisticated technology. This helps them to face competition and keep up with global standards. Thus this scheme will prove to be a major breakthrough in upgrading the technology of the micro and small enterprises.
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