Special Credit Linked Capital Subsidy for Technology Enablement of SC/ST MSEs

Home > Digital Ecosystem > II. Mentorship > Enlightener Series > Special Credit Linked Capital Subsidy for Technology Enablement of SC/ST MSEs

Status: Active

Classification: Public Sector Scheme

Release Date(s):
20th May 2023
11th April 2022

Offering: Subsidy/Incentive

Entity Type: Central Government

Reading Time: 8 Mins

Ticket Size: Upto ₹ 25Lakhs

Entity Name: Ministry of Micro, Small & Medium Enterprises

#Views: 137

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 this scheme…

Special Credit Linked Capital Subsidy for Technology Enablement for SC/ST MSEs (SCLCSS) Scheme was launched by the Ministry of Micro, Small and Medium Enterprises (MoMSME), Government of India w.e.f. May 17, 2017 with the aim of promoting/supporting new/existing SC/ST Micro & Small Enterprises (MSEs) in their expansion for enhanced participation in public procurement. Such MSEs could be operating across manufacturing & services sectors.

SCLCSS Scheme is one of the 4 components or interventions by National Scheduled Caste and Scheduled Tribe Hub (NSSH) Scheme that looks into the needs of SC/ST MSEs.

Initially, SCLCSS Scheme was a subset of the broader Credit Linked Capital Subsidy Scheme (CLCSS) for MSEs operating in approved 51 sectors/sub-sectors and was operational untill March 31, 2021. While CLCSS Scheme has now been discontinued, SCLCSS Scheme continues to be operational with coverage being expanded to SC/ST MSEs across all manufacturing sectors and service sectors as brought out in the National Industrial Classification (NIC) code.


How is it being implemented?

Under SCLCSS Scheme, grants in the form of capital subsidy is routed from MoMSME through designated Nodal Agencies/ Nodal Banks or SIDBI or NABARD to

  • SC/ST MSEs

Via Eligible Prime Lending Institutions (PLIs) who have sanctioned term loans to such SC/ST MSEs to cover the cost of purchase of new Plant & Machinery (P&M) and Equipment, for which the subsidy is being claimed.

Eligible PLIs includes such lender Banks, NBFCs and Financial Institutions who have executed a General Agreement (GA) with one of the designated Nodal Agencies/ Nodal Banks or SIDBI or NABARD, who in turn are authorized by MoMSME to release subsidy under this Scheme. Please get in touch with your lender to check if they are an Eligible PLI to implement this Scheme.

To get a sense of the designated Nodal Agencies/ Nodal Banks and PLIs, please refer to Point 3.3 on Pages 7 & 8 of PDF file on the guidelines of erstwhile CLCS-TUS Scheme.


What’s on offer?

I. Product

  • Capital subsidy on purchase of new P&M, Equipment for technology upgradation
  • Quantum:
    • 25% of institutional credit of up to ₹1 Crore to fund such purchase i.e. subsidy of upto ₹25 Lakhs
    • SC/ST MSEs who have already availed the subsidy under the (now not operational) CLCSS or earlier SCLCSS Scheme can claim additional subsidy for the differential amount subject to an overall limit of ₹25 Lakhs
  • Disbursement:
    • Subsidy under this Scheme would be received by MSE by way of a credit to their loan account (used to fund the purchase of P&M, Equipment) only on the expiry of 3 years provided the MSE has been in commercial production/service for those 3 years after installation & commissioning of the P&M, Equipment, on which subsidy under SCLCSS has been availed
    • Until then, the subsidy released by Government under this Scheme will be kept in the form of a Term Deposit of equivalent amount with PLI for 3 years with effect from Reference Date (date of release of last instalment of term loan used to fund the purchase of P&M, Equipment). On the expiry of the prescribed retention period of 3 years, PLIs will liquidate the Term Deposit Receipt (TDR) and credit the proceeds into the loan account of MSE after being satisfied that the requisite terms & conditions of SCLCSS including continuity of commercial production/ service of MSE are duly adhered to
      • This TDR will neither be eligible for earning any interest, nor can it be hypothecated/ pledged by MSE/PLI as security against any other liabilities/ loans
      • In the event of foreign currency term loans sanctioned by PLIs, the relevant subsidies are to be retained by PLIs in the shape of TDR in domestic currency

II. Purpose:

  • Purchase of new P&M, Equipment for technology upgradation

III. Borrower Type:

  • Sole Proprietorships, Partnerships, Co-operative Societies, Private & Public Limited Companies

IX. Turnaround Time

  • Time limit for PLI to apply for subsidy to designated Nodal Agencies/ Nodal Banks or SIDBI or NABARD on behalf of MSE:
    • Eligible claim with Reference Date (date of release of last instalment of term loan) of each quarter should be forwarded by the end of next quarter. For example, if the reference dates falls between January 1, 2022 to March 31, 2022, the claim should be forwarded latest by 30th June 2022
  • Time limit for Government releasing subsidy to PLI to be kept in the form of TDR:
    • Please contact your Lender PLI for more information on this
  • Time limit for PLI crediting subsidy to the loan account of MSE:
    • As described above, post 3 years with effect from Reference Date


Interested? Read ahead to check your eligibility….


Is your business a new or existing Micro or Small Enterprise as per MSMED Act 2006 with a valid Udyam Registration?


Has your business graduated from a Small Enterprise to Medium Enterprise on account of sanction of additional loan under this Scheme?


Has it been 3 years or less since your business has graduated from Small Enterprise to Medium Enterprise?


Is your business an SC/ST MSE, meaning:

In case of Proprietary MSE, is the proprietor an SC/ST?


In case of Partnership MSE, do SC/ST partners hold at least 51% in the firm?


In case of a Company, do SC/ST promoters hold atleast 51% stake?

III. Is your business engaged in manufacturing or service activities as per the National Industrial Classification (NIC) code?

IV. Your business is not covered under the RED category as per the Classification of industries for consent management (Schedule- VIII, rules 3(2) and 12 of Ministry of Environment & Forests, Govt. of India)? Please refer to Page 23 onwards of the PDF here

V. Are you looking for subsidy under this Scheme for new P&M, Equipment and not fabricated or second hand?

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


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

I. During April – December 2022, subsidies worth ₹15.24 Crores were released to 98 SC/ST MSEs under SCLCSS Scheme

II. During FY 2021-22, subsidies worth ₹106.53 Crores were released to 1,800 SC/ST MSEs under SCLCSS Scheme

III. Under the broader erstwhile CLCSS Scheme, from 2016-17 through 2021-22, subsidies worth ₹3,253.45 Crores have been release to 47,100 MSEs

  • Of these, maximum number of MSEs were supported in 2020-21 i.e. 15,213 MSEs (32%) were released capital subsidy worth ₹1,102.57 Crores (34%)


So, now, how should you go about it?

I. For submitting application, contact your Lender PLI directly

II. For information on:

III. For any queries, please contact:

  • Your Lender PLI





Go on then…and do spread the word!


  1. About the Scheme
  2. Detailed Guidelines on the Scheme
  3. Press Release for Extension and Expansion of Scope of the Scheme: Shri Narayan Rane, Union Minister for MSME launched Special Credit Linked Capital Subsidy Scheme (SCLCSS) for Services Sector.
  4. About Erstwhile CLCSS
  5. Latest Dashboard 1 on Erstwhile CLCSS
  6. Latest Dashboard 2 on Erstwhile CLCSS
  7. Latest Update 1 on the Scheme: MSME Ministry’s National SC-ST Hub scheme benefitted this many micro, small units till March 31, 2023
  8. Latest Update 2 on the Scheme: MSME associations welcome the launch of tech upgradation scheme

Did you find this article helpful?


Latest in Enlightener Series

error: Content is protected!!

Join our exclusive community for Women Entrepreneurs (& aspiring ones!)

To join our WhatsApp Community, click 👉 To join our Telegram Community, click 👉 To join our Mailing List, click 👉 To join our Social Media Community, click 👉
We will confirm.