for Technology Up-gradation of the Small Scale Industries
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Due to insufficient investment and lack of awareness of both the quality standards and access to modern technologies, a large percentage of Micro & Small Enterprises (MSEs) continue with outdated technology and plant & machinery. With increasing competition due to liberalization of the economy, the survival and growth of the MSMEs are critically dependent on their modernization and technological up gradation. Upgradation of both the process of manufacture and corresponding plant and machinery is necessary for the small enterprises to reduce the cost of production and remain price competitive at a time when cheaper products are easily available in the global market.
With the objective of assisting MSMEs in technology up-gradation, Ministry of MSME operates a Scheme for technology up-gradation of MSEs, called the Credit Linked Capital Subsidy Scheme (CLCSS). The Scheme aims at facilitating technology up-gradation by providing upfront capital subsidy to MSEs, including tiny, khadi, village and coir industrial units, on institutional finance (credit) availed of by them for modernization of their production equipment (plant and machinery) and techniques.
CLCSS provides 15 percent upfront capital subsidy (with effect from 29th September 2005, and 12% prior to that date) to MSEs on institutional finance availed of by them for induction of well established and improved technologies in the specified sub-sectors/products approved under the Scheme.
Existing MSEs with EM Part II, who upgrade their existing Plant and Machinery with state-of-the-art technology, with or without expansion
New MSEs with EM registration, which have set up their facilities only with appropriate eligible and proven technology duly approved by the Governing Technology Approval Board (GTAB), or Technical Sub Committee (TSC) of the CLCSS.
The units may be sole Proprietorship, Partner-ships, Co-operative Societies, Private and Public limited companies in the MSE sector.
Priority is given to women entrepreneurs.
The scheme is applicable only to those units to whom term loans have been sanctioned by eligible banks on or after September 29, 2005. Machinery purchased under Hire Purchase scheme of NSIC is also eligible.
If, on account of sanction of additional loan under CLCSS, an industry graduates from small scale to medium scale, it is still eligible for subsidy.
It is not necessary for the bank sanctioning loan under CLCSS to seek refinance in respect of term loan sanctioned by it, from refinancing agencies
The scheme covers identified activities and technology needs under the following sub-sectors: