"CLCSS Subsidy Scheme (CLCSS) for Technology Up gradation of the Small Scale Industries"
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Due to insufficient investment and lack of awareness of both the quality standards and access to modern technologies, a large percentage of Micro & Small Enterprises (MSEs) continue with outdated technology and plant & machinery. With increasing competition due to liberalisation of the economy, the survival and growth of the MSMEs are critically dependent on their modernisation and technological up gradation. Up gradation of both the process of manufacture and corresponding plant and machinery is necessary for the small enterprises to reduce the cost of production and remain price competitive at a time when cheaper products are easily available in the global market.
With the objective of assisting MSMEs in technology up gradation, Ministry of MSME operates a Scheme for technology up gradation of MSEs, called the Credit Linked Capital Subsidy Scheme (CLCSS). The Scheme aims at facilitating technology up gradation by providing upfront capital subsidy to MSEs, including tiny, khadi, village and coir industrial units, on institutional finance (credit) availed of by them for modernisation of their production equipment (plant and machinery) and techniques.
CLCSS provides 15 percent upfront capital subsidy (with effect from 29th September 2005, and 12% prior to that date) to MSEs on institutional finance availed of by them for induction of well established and improved technologies in the specified sub-sectors/products approved under the Scheme.
Technology up gradation: Definition:
Induction of state-of-the- art or near state-of-the- art technology that would be a significant step up from the present technology level to a substantially higher one involving improved productivity, (and/or) improvement in quality of products, (and/or) improved environmental conditions would constitute technology up gradation.
Eligible Beneficiaries :
1. Existing MSEs with EM Part II, who upgrade their existing Plant and Machinery with state-of-the-art technology, with or without expansion
2. New MSEs with EM registration, which have set up their facilities only with appropriate eligible and proven technology duly approved by the Governing Technology Approval Board (GTAB), or Technical Sub Committee (TSC) of the CLCSS.
3. The units may be sole Proprietorship, Partner-ships, Co-operative Societies, Private and Public limited companies in the MSE sector.
4. Priority is given to women entrepreneurs.
Eligible Criteria :
1. The scheme is applicable only to those units to whom term loans have been sanctioned by eligible banks on or after September 29, 2005. Machinery purchased under Hire Purchase scheme of NSIC is also eligible.
2. If, on account of sanction of additional loan under CLCSS, an industry graduates from small scale to medium scale, it is still eligible for subsidy.
3. It is not necessary for the bank sanctioning loan under CLCSS to seek refinance in respect of term loan sanctioned by it, from refinancing agencies
4. Mere replacement of existing equipment / technology with same equipment/technology will not qualify for subsidy under this scheme.
5. Scheme is not applicable to units upgrading with second hand machinery.
Scope of the Scheme :
The scheme covers identified activities and technology needs under the following sub-sectors:
1. Bio – tech industry
2. Common Effluent Treatment Plant
3. Corrugated Boxes
4. Drugs & Pharmaceuticals – including machinery for Schedule M compliance
5. Dyes and intermediates
6. Medicinal & Aromatic plants based industry
7. Plastic Moulded / Extruded Products and Parts / Components
8. Rubber Processing including Cycle / Rickshaw tyres
9. Food processing ( including Ice cream Mfr)
10. Poultry Hatchery/Cattle feed
11. Dimensional stone industry (excluding quarrying & mining)
12. Glass & Ceramic items, (Insulator ceramic, electrical ceramics, porcelain, bone china ware, stone ware, earthen ware, terra-cotta ceramic) including tiles
13. Leather / leather products incl, footwear & garments
14. Electronic equipment (test, measuring and assembly / manufacturing, industrial process control, analytical, medical, Electronic consumer & communication equipment etc
15. Fans & Motor Industry
16. GLS Lamps
17. Information Technology (Hardware)
18. Mineral Filled sheath heating elements
19. Transformer/Electrical stampings / Laminations / Coils / Chokes including Solenoid coils
20. Wires and cables
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 & Jewellery
29. Steel Furniture
31. Non ferrous foundry
32. Sports Goods
34. Readymade Garments
35. Wooden furniture
36. Mineral Water Bottle
37. Paints, Varnishes, Alkyds & alkyd products
38. Agricultural Implements & Post Harvest Equipment
39. Beneficiation of Graphite and Phosphate
40. Khadi & Village Industries
41. Coir & Coir Products
42. Steel Re-rolling & Pencil ingot making
43. Zinc sulphate
44. Welding electrodes
45. Sewing Machine Industry
46. Industrial gases
47. Printing Industry
48. Machine tools
49. Copper strip industry
Nodal Agencies :
3. State Bank of India
4. Canara Bank
5. Bank of Baroda
6. Punjab National Bank
7. Bank of India
8. State Bank of Bikaner & Jaipur
9. Tamil Nadu Industrial investment Corporation
10. National Small Industries Corporation.
Eligible Primary Lending Institutions :
1. All Scheduled Commercial banks
2. Scheduled Co-operative Hanks
3. Regional Rural Banks
4. State Financial Corporations ( SFCs)
Monitoring of the Scheme :
The Scheme is monitored by the Governing & Technology Approval Board (GTAB) of the CLCSSS. Secretary (MSME), Ministry of MSME, Govt of India is the Chairperson of the Board.
Scheme : -
The Ministry of Micro, Small and Medium Enterprises is operating a scheme namely “Credit Linked Capital Subsidy Scheme (CLCSS) for technology up gradation of Micro and Small Enterprises. The Scheme was launched in October, 2000 and revised w.e.f. 29.09.2005. The revised scheme aims at facilitating Technology Up gradation of Micro and Small Enterprises by providing 15% capital subsidy (12% prior to 2005) on institutional finance availed by them for induction of well established and improved technology in approved sub-sectors/products. The admissible capital subsidy under the revised scheme is calculated with reference to purchase price of Plant and Machinery. Maximum limit of eligible loan for calculation of subsidy under the revised scheme has also been raised from Rs. 40 lakhs to Rs. 100 lakh w.e.f. 29-09.2005.