Cabinet approves continuation of Credit Linked Capital Subsidy and Technology Up-gradation Scheme (CLCS-TUS) beyond 12th Plan for three years from 2017-18 to 2019-20

We would like to inform you that the Ministry of Micro, Small & Medium Enterprises (MSME) has issued a Press Release dated 13thFebruary, 2019 informing about the approval of a three year extension i.e. 2017-18 to 2019-20 of the Credit Linked Capital Subsidy Scheme (CLCSS) and Technology Up-gradation Scheme (TUS) for MSMEs with a total outlay of Rs.2900 crore by the Cabinet Committee on Economic Affairs. Reference Circular No.ES/382/2018-19 .

The Credit Linked Capital Subsidy Scheme is for technology upgradation of MSMEs in the country. Under this scheme, technology up-gradation in MSEs is facilitated by providing an upfront capital subsidy of 15% (on institutional finance of upto Rs 1 crore availed by them) for induction of well-established and improved technology in the 51 sub-sectors / products approved. The Scheme was launched in the financial year 2000-2001.

Objective of the scheme-

  • To improve the competitiveness of MSMEs by integrating various on-going schematic interventions aimed at up-grading technology through Credit Linked Capital Subsidy (CLCS),
  • Hand holding for zero defect zero effect manufacturing (ZED),
  • To increase productivity through waste reduction (Lean), design intervention (Design), cloud computing (Digital MSMEs), facilitation of intellectual property (IPR),
  • To nurture new ideas (Incubation).

Provisions made in this scheme-

  • To promote entrepreneurship for
  1. SC/STs,
  2. women NER,
  3. Hill States (Jammu & Kashmir, Himachal Pradesh & Uttarakhand)
  4. Island Territories (Andaman & Nicobar and Lakshadweep)
  5. Aspirational Districts/ LWE Districts,

In the above cases the subsidy shall be admissible also for investment in acquisition / replacement of plant & machinery / equipment & technology up-gradation of any kind.

  • Scheme would be demand driven.
  • Coverage of the scheme has been made more inclusive.
  • Promoting reduction in emission level of greenhouse gases through Zero Defect & Zero Effect.
  • Improving the competitiveness through reduction in defect / wastage during the manufacturing process of the products.
  • Promoting the innovation, digital empowerment of MSMEs, design interventions and support the protection of intellectual property of MSMEs.
  • Facilitating technology up-gradation to MSEs, improvement in Quality of products by MSMEs, enhancement in productivity, reduction in waste.
  • To promote a culture of continuous improvement.

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