Scheme for Technology and Quality Upgradation Support to MSMEs

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Status: Active

Classification: Private Sector Scheme

Release Date(s):
20th August 2021

Offering: Subsidy/Incentive

Entity Type: Central Government

Reading Time: 6 Mins

Ticket Size: ₹10 Lakhs

#Views: 81

Disclaimer….before you read ahead!

The information contained herein is of a general nature and for information purposes only, with the intent of raising awareness around various resources, schemes etc. available for women entrepreneurs in India. It is not intended to address the circumstances of any particular individual or entity. It does not purport to be all-inclusive or necessarily contain all the information that may be relevant for the reader, and may be subject to updation, revision or amendment. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to remain accurate in the future. The reader, therefore, is required to exercise their discretion; and not act on such information without appropriate professional advice after a thorough examination of the particular situation.

Furthermore, we are not a lender and are not authorized by the Reserve Bank of India to act as one. By disseminating the information contained herein, we are not soliciting any borrower or customers for the company or organization mentioned herein nor do we intend to syndicate any capital for the reader of this email.

About the scheme…

Scheme for Technology and Quality Upgradation Support to MSMEs (TEQUP) was launched by Ministry of Micro, Small & Medium Enterprises (MoMSME), Government of India during the financial year 2010-11 with the aim of enhancing competitiveness of the MSME sector through implementation of Energy Efficiency projects.

TEQUP got further boost to its size and scope as it became one of the ten components of the National Manufacturing Competitiveness Programme (NMCP) announced in December 2014 to develop global competitiveness among Indian MSMEs.

Since December 2019, TEQUP has been subsumed within MoMSME’s Credit Linked Capital Subsidy Scheme to form the umbrella scheme Credit Linked Capital Subsidy and Technology Upgradation Scheme (CLCS TUS). Additionally, CLCS TUS also covers six other schemes of NMCP.

How is it being implemented?

Under TEQUP, grants in the form of capital subsidy is routed through designated Nodal Agencies/ Nodal Banks to,

  • MSMEs, with priority given to SC/ST and women entrepreneurs

Via SIDBI’s Branch Office (SIDBI BO) or Prime Lending Institutions (PLIs) as a supplement to the loans sanctioned by SIDBI BO/ PLIs to such MSMEs towards the cost of Plant & Machinery (P&M) for implementation of Energy Efficient Technologies (EET) as per the approved Detailed Project Report (DPR).

Under TEQUP, SIDBI is the designated Nodal Agency and designated Nodal Banks include Canara Bank, Bank of Baroda, Punjab National Bank, Bank of India and State Bank of India.

PLIs includes such lender Banks and Financial Institutions as approved or decided by MoMSME. Please get in touch with your lender to check if they are an PLI under this Scheme.

While Credit Linked Capital Subsidy component of CLCS TUS has been discontinued since April 2020, the other components of the umbrella CLCS TUS seem to be active.

What’s on offer?
I. Product:

  • Interest free and non-returnable grant/subsidy to the extent of 25% of cost of P&M or ₹10 Lakhs, whichever is higher

II. Purpose:

  • Towards cost of P&M for implementation of EET

III. Borrower Type:

  • Sole Proprietorship, Partnership, Private Limited Company or Public Limited Company.

IV. Additional Conditions

  • Release of grant/subsidy under TEQUP is subject to:
    • Installation of new machinery and equipment at site based on physical inspection of machines by SIDBI BO/PLI, and
    • Execution of the agreement by SIDBI BO/ PLI on behalf of the Government of India
  • Grant/subsidy is to be used for the specified purpose and not to be adjusted against defaults in repayments by borrower
  • Grant/subsidy if claimed based on false information would be required to be refunded along with penal interest
  • In case the industrial unit becomes non-operational within two years of the receipt of grant/subsidy, it will have to refund the subsidy availed, along with the interest to be charged from the date of closure till the date of refund at the Prime Lending Rate (PLR) of SIDBI BO/ PLI

IX. Turnaround Time

  • For more information on this, please reach out to the nearest SIDBI BO or PLI


Interested? Read ahead to check your eligibility…

I. Can your business be classified as an MSME?

(Note that definition of Micro-enterprise or Small-enterprise per MSMED Act has been changed since July 1, 2020. Please click here for concise details)

II. Has your business filed an UAM (Udyog Aadhaar Memorandum) registration?

III Do you have a Detailed Project Report (DPR) prepared by a Qualified Energy Manager/Auditor to implement EET under TEQUP?

IV. Does the EET machinery proposed to be installed have minimum of 15% energy saving which can be verified by the energy audit report to be submitted at the time of submission of subsidy application?

If your answers to the questions above are an emphatic YES, you are all set to avail grant/subsidy under TEQUP!

So…how big is this scheme and what has been done so far?

I. Under TEQUP, till March 31, 2021, proposals for aggregate grant/subsidy claims worth ₹81.35 Crores to 1,044 units were released

II. The annual budgetary allocation towards TEQUP’s broader umbrella scheme i.e. CLCS TUS has been approx. ₹654 Crores and ₹315 Crores for the financial years 2020-21 and 2021-22 respectively

So, now, how should you go about it?

I. For submitting application or for any queries:

  • Please contact your lender from whom you have or are looking to avail a loan towards cost of P&M for implementation of EET. Such a lender should either be SIDBI BO or PLI approved by MoMSME

II. For information around the process and indicative list of documentation required, please download the document mentioned against Point 5.p “TEQUP writeup English 25052021” here

Go on then…and do spread the word!


  1. About TEQUP – Latest: Point 5.p “TEQUP writeup English 25052021”
  2. About TEQUP
  3. Budgetary allocations towards CLCS TUS
  4. History of TEQUP 1
  5. History of TEQUP 2
  6. Update on CLCS component of CLCS TUS
  7. Update on CLCS component of CLCS TUS

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