What is a CLCSS (Credit Linked Capital Subsidy Scheme)?

CLCSS scheme stands for Credit Linked Capital Subsidy Scheme. It is a scheme launched by the Indian Government to provide subsidies on home loans to economically weaker sections (EWS) and lower income groups (LIG) of society.

It promotes affordable housing for all. Under this scheme, the government provides interest subsidies to eligible beneficiaries. It helps to reduce their overall housing loan burden and makes homeownership more accessible and affordable.

To claim a subsidy under the Credit Linked Capital Subsidy Scheme (CLCSS), Micro and Small Enterprises (MSMEs) need to apply through Primary Lending Institutions (PLIs) where they avail of term loans. You can claim the subsidy online. The total number of availed CLCSS units can vary. It is recommended to check with the relevant government agencies for the most up-to-date information.

Benefits of the CLCSS scheme

Financial Incentives:

MSMEs are eligible for a capital subsidy of 15% on the cost of plant and machinery, up to a limit of INR 1 crore (approximately USD 140,000). This financial incentive helps offset the costs associated with technology upgradation. It makes it more affordable for MSMEs.

Improved Technology:

The Capital Subsidy Scheme encourages MSMEs to upgrade their technology. It leads to improved productivity, better product quality, and increased competitiveness.

Access to Finance:

MSMEs that apply for term loans up to INR 1 crore (approximately USD 140,000) from eligible financial institutions can avail of the capital subsidy under this scheme.

Job Creation:

The emphasis on labor-intensive industries highlights the commitment of the government to create job opportunities. It also supports the growth of the labor-intensive sector.

Sustainable Economic Growth:

The Capital Subsidy Scheme aims at promoting sustainable economic growth by supporting MSMEs in upgrading their technology and increasing their competitiveness.

Increased Market Share:

By upgrading their technology, MSMEs can increase their market share and become more competitive in the marketplace.

Improved Product Quality:

MSMEs that upgrade their technology can produce higher-quality products. It leads to increased demand and improved market positioning.

Simplified Application Process:

MSMEs with a valid Udyog Aadhaar Memorandum (UAM) number are eligible for the Capital Subsidy Scheme. The application process is simplified for these eligible enterprises.

Eligibility Criteria for CLCSS Scheme

Micro and Small Enterprises (MSEs):

MSEs having a valid Udyog Aadhaar Memorandum (UAM) number are eligible for the scheme.

Loan Sanction:

Term loans up to INR 1 crore (approximately USD 140,000) for purchasing eligible plants and machinery are eligible for capital subsidy under the scheme.

Export-Oriented Units:

Export-oriented and labor-intensive new sectors/activities will be considered under the scheme.

Technology Upgradation:

Industries that are upgrading from small-scale to medium-scale on account of the sanction of additional loans under the scheme are eligible for assistance.

Refinance Scheme:

Eligibility for the capital subsidy under the scheme is not linked to any refinance scheme for the nodal agencies.

Businesses Eligible to Avail of Subsidy

  1. Micro, small, and medium enterprises (MSMEs) engaged in the manufacturing of eligible products, as defined by the Ministry of Micro, Small, and Medium Enterprises (MSME).
  2. Enterprises engaged in the production of goods and services and repair and maintenance services are eligible to avail of the subsidy. They also have an investment in plant and machinery up to Rs. 10 crores.
  3. Enterprises that are not engaged in the production of goods and services for sale, such as cooperative societies and non-governmental organizations (NGOs).
  4. Enterprises eligible to receive benefits under the MSME Development Act, 2006, can also enjoy the subsidy.

CLCSS SchemeDocuments Required

  • Application form:

The first step is to fill out an application form. You can obtain it from the lending institution or the implementing agency.

  • Proof of identity:

Applicants are required to submit proof of identity. It can be a PAN card, Aadhaar card, passport, or voter ID card.

  • Proof of address:

Applicants are required to provide proof of their current residential address. It can be a utility bill, passport, or rental agreement.

  • Business registration proof:

MSMEs are required to provide proof of their business registration. It may include a Udyog Aadhaar Memorandum (UAM), PAN card, or any other relevant registration certificate.

  • Bank statements:

The applicant’s last six months’ bank statements are required to evaluate his creditworthiness.

  • Project Report:

MSMEs are required to submit a detailed project report. It should include the details of the proposed project, machinery and equipment, and working capital requirements.

  • Quotations for machinery and equipment:

MSMEs should submit quotations for the machinery and equipment they intend to purchase.

  • Tax returns: Applicants are required to provide their latest income tax returns. It demonstrates their financial stability and capacity to repay the loan.


To conclude, the Credit Linked Capital Subsidy Scheme (CLCSS) is a crucial initiative by the Government of India to support small and medium enterprises (SMEs) in the manufacturing sector. With an estimated 63 million MSMEs in India, the scheme provides financial assistance to eligible businesses to upgrade their technology and improve competitiveness.

The support in the form of term loans up to INR 1 crore is expected to encourage the growth of MSMEs and create job opportunities in labor-intensive industries. By obtaining a valid UAM number, MSMEs can take advantage of various government schemes and benefits to enhance their business operations.

By indifi

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