Thursday, March 3, 2011

Credit Linked Capital Subsidy Scheme (clcss )

Credit Linked Capital Subsidy Scheme (clcss )

The Ministry of Micro, Small & Medium Enterprises (MSME) is operating a scheme for technology upgradation of Small Scale Industries (now MSEs) called the Credit Linked Capital Subsidy Scheme (CLCSS). The Scheme aims at facilitating technology upgradation by providing upfront capital subsidy to SSI units (now MSEs), including tiny, khadi, village and coir industrial units, on institutional finance (credit) availed by them for modernisation of their production equipment (plant and machinery) and techniques in specified sub-sectors/products approved under the Scheme.

The ceiling for eligibility of loans under the Scheme is Rs. 1 crore and rate of subsidy is 15 per cent. Further, in the light of the experience gathered through implementing the Scheme, certain modifications have been made in taking up technology upgradation on a larger scale.

Monitoring of the Scheme: The Scheme is monitored by the Governing and Technology Approval Board (GTAB) of the CLCSS. The Secretary (MSME) is the Chairperson of the Board with the Additional Secretary & Development Commissioner (MSME) as its Member-Secretary. The GTAB also periodically reviews the functioning of the Scheme. There is a Technical Sub-Committee under the GTAB to consider inclusion of new sub-sectors/products and Well Established and Improved Technologies under the Scheme.


Nodal Agencies: The Scheme is being implemented through eligible Primary Lending Institutions (PLIs) which include Scheduled Commercial Banks, Scheduled Cooperative Banks [including urban cooperative banks co-opted by the SIDBI under the TUFS of the Ministry of Textiles], Regional Rural Banks (RRBs), State Financial Corporations (SFCs) and North Eastern Development Financial Institution (NEDFI). The capital subsidy is released to SIDBI and NABARD for on-ward disbursement to the beneficiary units through eligible PLIs. An advance of Rs. 5 crore and Rs. 3 crore has been placed with SIDBI and NABARD respectively for operationalising the Scheme.

Besides, an advance of Rs. 1 crore each has also been placed with the eight Public Sector Banks/Government Agencies namely State Bank of India, Canara Bank, Bank of Baroda, Punjab National Bank, Bank of India, Andhra Bank, State Bank of Bikaner

* Progress of the Scheme during the year is however, NIL as formal approval for continuation of the Scheme in XI Plan has been received
recently only. It is expected that entire allocation for subsidy in areas other than NER will be utilised.

Consequent upon the increase of ceiling for eligibility of loans from Rs. 40 lakh to Rs. 1.0 crore and in the rate of subsidy from 12 per cent to 15 per cent from September 29, 2005, the progress under the CLCSS has been quite encouraging. The cumulative progress of CLCSS before amendment of the scheme i.e. before 29.9.2005 was only 930 environment management. The scheme provides incentive to undertakings in the Sector for having acquired ISO certifications.

The salient features of the Scheme:
l The Scheme envisages reimbursement of expenses for acquiring ISO9000/14001(or its equivalent) certification, to the extent of 75% of the cost subject to a maximum of Rs. 75,000/- in total.
l All Micro and Small Scale Enterprises having Entrepreneus Memo&
Jaipur and Tamil Nadu Industrial Investment Corporation Ltd., which have been inducted as nodal agencies/banks for disbursement of subsidy under the Scheme. The National Small Industries Corporation Ltd. has also been inducted as nodal agency for disbursement of subsidy under the Scheme. These nodal banks/ agencies consider proposals only in respect of credit approved by their respective branches with effect from 04.04.2006.

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