Credit Linked Capital Subsidy Scheme (CLCSS) — Ministry of MSME provides a 15% capital subsidy (capped at ₹15 lakh) on plant & machinery for technology upgradation by Micro and Small Enterprises in 75+ approved sub-sectors.
This page is an educational guide to CLCSS — Credit Linked Capital Subsidy Scheme, administered by the Ministry of MSME, Government of India.
Instant Udyam is a private consultancy operated by Pramila Business Solutions. We are NOT a government agency and we do NOT process CLCSS applications.
To apply for CLCSS: contact one of the 12 nodal banks listed below or visit dcmsme.gov.in. We help with Udyam Registration filing, which is the prerequisite.
CLCSS — Credit Linked Capital Subsidy Scheme — is a central sector scheme launched by the Ministry of MSME in October 2000 to support technology upgradation by Micro and Small Enterprises (MSEs). It provides a one-time capital subsidy of 15% of the cost of eligible plant & machinery, capped at ₹15 lakh per unit.
The scheme works on a credit-linked basis: you cannot claim CLCSS subsidy by buying machinery with your own funds. The investment must be financed by a term loan from one of the 12 approved nodal/Member Lending Institutions, and the subsidy is routed through them.
The 15% subsidy is calculated on eligible plant & machinery up to a ceiling of ₹1 crore. Beyond ₹1 crore investment, the subsidy still caps at ₹15 lakh (= 15% × ₹1 crore).
| Plant & Machinery Cost | 15% Subsidy | Capped At |
|---|---|---|
| ₹25 lakh | ₹3.75 lakh | ₹3.75 lakh |
| ₹50 lakh | ₹7.50 lakh | ₹7.50 lakh |
| ₹1 crore | ₹15 lakh | ₹15 lakh |
| ₹2 crore | (₹30 lakh) | ₹15 lakh max |
The rest of the project cost is covered by your contribution (typically 5-15%) plus a term loan from the bank. The term loan is what gets the CLCSS subsidy linkage.
CLCSS started with 51 sub-sectors in 2000 and now covers over 75. The major categories:
Full updated sub-sector + technology list on dcmsme.gov.in →
Only these 12 financial institutions can process CLCSS subsidy claims:
Your URN is verified by the bank during credit appraisal. File Udyam Registration in 24-48 hours →
Pick the specific machinery or technology you want to upgrade to. Verify it is on the CLCSS-approved list for your sub-sector by checking dcmsme.gov.in.
Obtain at least 2 quotations for the eligible machinery. Prepare a project report covering current state of machinery, proposed upgrade, and financial cost-benefit analysis.
State explicitly that you want CLCSS coverage on this term loan. Without this, the bank may not flag your loan for subsidy claim.
Bank conducts credit appraisal, verifies Udyam, confirms the technology is CLCSS-approved, and sanctions the term loan.
Use the loan to buy the eligible machinery. Maintain proof of purchase (invoices, payment statements, installation certificate).
Bank submits the post-disbursement claim with installation certificate to the nodal agency. The subsidy is credited to a no-lien deposit account at the bank.
The subsidy stays in the no-lien deposit for 3 years. If your loan account stays regular (no NPA), the subsidy is adjusted against your outstanding loan balance.
Udyam Registration is mandatory for CLCSS subsidy and most MSME schemes. We file it for you in 24-48 hours.
Apply for Udyam →CLCSS is primarily designed for technology upgradation of existing units. New ventures are typically routed through PMEGP for the margin money subsidy.
No. A unit can claim CLCSS subsidy once per sub-sector code. You can however claim CLCSS again if you diversify into a different eligible sub-sector.
Yes — they are complementary. CLCSS provides the 15% capital subsidy on plant & machinery. CGTMSE provides the credit guarantee so the bank does not need collateral.
Then the investment is not eligible for CLCSS subsidy. Switch to a machinery that is on the approved list, or explore state-level subsidies.
Typical timeline: 2-4 weeks for bank sanction → 4-8 weeks for post-disbursement claim → 4-12 weeks at nodal agency. The 3-year lock-in starts only after the subsidy is parked.
