This essay has been submitted by a student. This is not an example of the work written by professional essay writers.

Research Study on The Credit Linked Capital Subsidy Scheme

downloadDownload printPrint

Pssst… we can write an original essay just for you.

Any subject. Any type of essay. We’ll even meet a 3-hour deadline.

Get your price

121 writers online

Download PDF

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 Due to insufficient capital and widespread unawareness micro and small enterprises were carrying out operations with outdated technology.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.

Objectives Of Study

  • To list out the objectives of CLCSS scheme.
  • To elaborate the procedure for availing loans under this scheme
  • To graphically represent the flow of this scheme
  • To state the performance of this scheme


Secondary data pertaining to the research article has been obtained from online websites and journals.

Credit Linked Capital Subsidy Scheme

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.

Objective Of 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.

Beneficiaries Of This Scheme

Only micro and small enterprises with a Udyog Aadhaar Memorandum (UAM) number can benefit from this scheme.

Duration Of The 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:

  1. Biotech Industry
  2. Common Effluent Treatment Plant
  3. Corrugated Boxes
  4. Drugs and Pharmaceuticals
  5. Dyes and Intermediates
  6. 6. Industry based on Medicinal and Aromatic plants
  7. Plastic Moulded/ Extruded Products and Parts/ Components
  8. Rubber Processing including Cycle/ Rickshaw Tyres
  9. Food Processing (including Ice Cream manufacturing)
  10. Poultry Hatchery & Cattle Feed Industry
  11. Dimensional Stone Industry (excluding Quarrying and Mining)
  12. Glass and Ceramic Items including Tiles
  13. Leather and Leather Products including Footwear and Garments
  14.  Electronic equipment viz test, measuring and assembly/ manufacturing, Industrial process control;Analytical, Medical, Electronic Consumer & Communication equipment etc.
  15. Fans & Motors Industry
  16.  General Light Service(GLS) lamps
  17.  Information Technology (Hardware)
  18. Mineral Filled Sheathed Heating Elements
  19.  Transformer/ Electrical Stampings/ Laminations /Coils/Chokes including Solenoid coils
  20.  Wires & Cable Industry
  21. Auto Parts and Components
  22. Bicycle Parts
  23.  Combustion Devices/ Appliances
  24.  Forging & Hand Tools
  25.  Foundries – Steel and Cast Iron
  26.  General Engineering Works
  27.  Gold Plating and Jewellery
  28. Locks
  29.  Steel Furniture
  30. Toys
  31.  NonFerrous Foundry
  32. Sport Goods
  33.  Cosmetics
  34.  Readymade Garments
  35. Wooden Furniture
  36. Mineral Water Bottle
  37.  Paints, Varnishes, Alkyds and Alkyd products
  38.  Agricultural Implements and Post Harvest Equipment
  39.  Beneficiation of Graphite and Phosphate
  40. Khadi and Village Industries
  41.  Coir and Coir Products
  42.  Steel Re¬rolling and /or Pencil Ingot making Industries
  43. Zinc Sulphate
  44. Welding Electrodes
  45. Sewing Machine Industry

Procedure For Availing Loans Under This Scheme

This Scheme is linked with term loans availed by the MSEs from Banks or Financial Institutions.

  1. To claim subsidy under CLCSS, eligible MSEs are required to apply online through Primary Lending Institutions (PLIs), from where the MSEs availed term loan for up-gradation of technology.
  2. The completed application is then uploaded by PLI through Online Application and Tracking System to the attached Nodal Agency, which, in turn, recommends the application online to Office of DC (MSME) for release of subsidy.
  3.  After processing of application and subject to availability of funds, due approval is accorded from competent authority and concurrence of Internal Finance Wing, after which funds are released to Nodal Agencies.
  4. Funds are then transferred by the Nodal Agencies to the PLIs where the account of the MSE is operated.


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.

Remember: This is just a sample from a fellow student.

Your time is important. Let us write you an essay from scratch

experts 450+ experts on 30 subjects ready to help you just now

delivery Starting from 3 hours delivery

Find Free Essays

We provide you with original essay samples, perfect formatting and styling

Cite this Essay

To export a reference to this article please select a referencing style below:

Research Study on the Credit Linked Capital Subsidy Scheme. (2018, September 15). GradesFixer. Retrieved October 24, 2021, from
“Research Study on the Credit Linked Capital Subsidy Scheme.” GradesFixer, 15 Sept. 2018,
Research Study on the Credit Linked Capital Subsidy Scheme. [online]. Available at: <> [Accessed 24 Oct. 2021].
Research Study on the Credit Linked Capital Subsidy Scheme [Internet]. GradesFixer. 2018 Sept 15 [cited 2021 Oct 24]. Available from:
copy to clipboard

Sorry, copying is not allowed on our website. If you’d like this or any other sample, we’ll happily email it to you.

    By clicking “Send”, you agree to our Terms of service and Privacy statement. We will occasionally send you account related emails.


    Attention! This essay is not unique. You can get a 100% Plagiarism-FREE one in 30 sec

    Receive a 100% plagiarism-free essay on your email just for $4.99
    get unique paper
    *Public papers are open and may contain not unique content
    download public sample

    Sorry, we could not paraphrase this essay. Our professional writers can rewrite it and get you a unique paper.



    Please check your inbox.

    Want us to write one just for you? We can custom edit this essay into an original, 100% plagiarism free essay.

    thanks-icon Order now

    Hi there!

    Are you interested in getting a customized paper?

    Check it out!
    Having trouble finding the perfect essay? We’ve got you covered. Hire a writer

    Haven't found the right essay?

    Get an expert to write you the one you need!


    Professional writers and researchers


    Sources and citation are provided


    3 hour delivery