Credit Linked Capital Subsidy and Technology Up-gradation Scheme

The Central Government has planned to continue the Credit Linked Capital Subsidy and Technology Up-gradation Scheme (CLCS-TUS) beyond the 12th Plan for three years (2017-20). The scheme was earlier introduced with the object of facilitating technology upgradation in MSMEs by providing an upfront capital subsidy of 15% (on institutional finance of up to INR 1 Crore availed by them) for the installation of well-established and improved technology in specified sub-sectors/products. This article looks at the components of the scheme.

Components of the Scheme

The Credit Linked Capital Subsidy and Technology Up-gradation Scheme is a programme that has seven components, namely

Credit Linked Capital Subsidy (CLCS)
Financial Support to MSMEs in ZED Certification
Lean Manufacturing Competitiveness (LMC)
Design expertise to the manufacturing MSME sector
Digital MSME
Building Awareness on Intellectual Property Rights (IPR)
Support for Entrepreneurial and Managerial Development of SMEs through Incubators

Credit Linked Capital Subsidy CLCS

This component aims to facilitate technology up-gradation to MSEs via institutional finance to bring about well-established and proven technologies in the specified sub-sector/ products that are approved for the scheme. The following are the facets of CLCS:

Upfront subsidy of 15% on institutional credit and up to Rs. 1 Crore for identified sectors/ sub sectors/ technologies.
Flexibility to review identified technologies/ subsectors/ technologies.
Includes more than 1000 machines under approved sectors/ sub sectors/ technologies.
Online application and tracking system.
Implemented through 11 nodal banks/agencies.

Financial Support to MSME in ZED Certification

This component is prepared after merging QMS/QTT scheme, creating an environment for competitive, quality and clean manufacturing. Its features include:

Hand holding support based on online self-assessment, provision of Rs. 5 lakh for GAP analysis, landholding, and consultancy.
Development/Implementation of Technology.
Assessment/Rating by enrolling Credit Rating Agencies or other eligible agencies. Payment to assessors by the National Monitoring and Implementation Unit (NMIU)/Implementing Agency (IA).
An additional rating of the Defence angle i.e. Defence ZED by enrolled Credit Rating Agencies/ other agencies valid for four years.
Re-assessment/re-rating by Credit Rating and other agencies.

Implementing Agencies: The component of the scheme is implemented by MSME IS/TCs/State Government Institution/departments/organizations of the concerned State Government and other enlisted institutions.

Lean Manufacturing Competitiveness (LMC)

The goal of LMC is to enhance the manufacturing competitiveness of MSMEs by applying various Lean Manufacturing Techniques that results in reducing wastes, increasing productivity and introducing innovative practices to develop competitiveness. The component aims at:

Developing a mini cluster (10 units) i.e. Special Purpose Vehicle (SPV) for Lean intervention at the unit level.
Providing financial assistance of up to INR 36 lakh per mini cluster.

Implementing Agencies: The scheme is implemented by MSME DJs/ICs/State Government Institutions/Departments/Organizations of the concerned State Government and other enlisted institutions as empanelled/assigned work under the scheme.

Design Enterprise for Manufacturing MSME Sector

This component aims at developing the industry in understanding and applying design and promoting design as a value-added activity so as to blend it with the mainstream business and industrial processes of MSMEs.
Design Project: To facilitate MSMEs to expand new design strategies and design related products through design interventions and consultancies.
Students Design Projects: Students in the final year of UG/PG from institutes registered for the scheme are eligible for project work done for the respective MSMEs.

Implementing Agencies: The scheme is implemented by MSME DIs/TCs/State Government Institutions/Departments/Organizations of the concerned State Government and other enlisted institutions as empanelled/assigned work under the scheme.

Digital MSME

The scheme motivates MSMEs to adopt information and communication technology tools/applications to make them digitally empowered. The major activities proposed here are as follows:

Development of e-portal, software/apps etc to make MSMEs digitally empowered.
Digital literacy and c-marketing involving EDCs.
Assistance to 1'1' related items to various State Government Departments.

Implementing Agencies: The scheme is implemented by MSME DIs/TCs/ State Government institutions/department/organizations of the concerned State Government and others as empanelled/assigned work under the scheme.

Building Awareness on Intellectual Property Rights (IPR)

The scheme takes initiatives in creating awareness of MSMEs about intellectual property rights to take measures in safeguarding their ideas and business strategies. The GoI Assistance for Patent/ GI Registration is as follows:

Domestic Patent	Rs. 1 Lakhs
Foreign Patent	Rs. 5 Lakhs
GI Registration	Rs. 2 Lakhs
Trade mark	Rs. 10,000

Implementing Agencies: The scheme is implemented by MSME DIs/TCs/ State Government Institutions/Departments/Organizations of the appropriate State Government and other institutions that are enlisted/assigned work under the scheme.

Support for Entrepreneurial and Managerial Development of SMEs through Incubators

The scheme intends to promote and assist in the adoption of the latest technologies in manufacturing and knowledge-based innovative MSMEs that pursue validation of ideas at the proof of concept level. Some of its other provisions are as follows:

The I lost institution (III)/Business Incubator (BI) receives financial assistance of up to Rs. 15 lakhs for each idea.
I-II/131 is provided with financial assistance of up to Rs. 1 Crore for purchasing plant and machinery to strengthen their R&D capabilities.

Implementing Agencies: The scheme is implemented by MSME DIs/TCs/ State Government Institutions/Departments/Organizations of the concerned State Government and other institutions that are enlisted/assigned work as per the scheme.