Government of India
Office of the Development Commissioner
(Micro, Small & Medium Enterprises)
Ministry of Micro, Small & Medium Enterprises

‘A’ Wing, 7th Floor, Nirman Bhawan,
New Delhi-110 108

No. 41(P)/NMCP/TEQUP/EFC/2017(Pt.-2)

Dated: 06th March, 2019

OFFICE MEMORANDUM

Subject: 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-reg.

The Central Government has decided to continue the Credit Linked Capital Subsidy and Technology Up-gradation Scheme (CLCS-TUS) with a total outlay of Rs. 2900 crore beyond 12th Plan for three years from 2017-18 to 2019-20 recommended by the Expenditure Finance Committee (EFC).

2. The Credit Linked Capital Subsidy & Technology Up-gradation Scheme is conceived as an umbrella programme. There will be 07 (seven) components as indicated here under:

i. Credit Linked Capital Subsidy (CLCS)

ii. Financial Support to MSMEs in ZED Certification

iii. Lean Manufacturing Competitiveness

iv. Design expertise to manufacturing MSME sector.

v. Digital MSME

vi. Building Awareness on Intellectual Property Rights (IPR)

vii. Support for Entrepreneurial and Managerial Development of SMEs through Incubators

Details of the scheme components arc as under:

A. Credit Linked Capital Subsidy:

The objective of the component is to facilitate technology up-gradation to MSEs through institutional finance for induction of well established and proven technologies in the specified sub-sector / products approved under the scheme.

a. Upfront subsidy of 15% on institutional credit up to Rs. 1 crore (i.e. a subsidy cap of Rs.15.00 lakh) for identified sectors /subsectors/ technologies.

b. Flexibility for review of the identified technologies/subsectors also exists.

c. Includes more than 1000 machines under the approved sectors /subsectors / technologies

d. Online Application and Tracking System already in place.

e. Presently scheme is being implemented through 11 nodal banks/agencies, however, almost all Commercial Banks, Pvt. Banks & RRBs are acting as PLI through these 11 nodal banks / agencies {SIDBI, NABARD, SBI (SBI & SBBJ), PNB, BoB, Canara, Corporation Bank, Indian Bank, Bank of India & TIICL}

f. In order to ensure fair inclusion of SC/ST category, women entrepreneurs and entrepreneurs from NER, Hill states (Jammu & Kashmir, Himachal Pradesh & Uttarakhand) island territories (Andaman & Nicobar and Lakshadweep) and the identified Aspirational Districts/ I,WE Districts, the subsidy has also been proposed to be admissible also for investment in acquisition /replacement of plant & machinery /equipments & technology up-gradation of any kind.

B. Financial Support to MEMEs in ZED Certification :

This component was formulated after merging the QMS/QTT scheme to create an eco system for competitive, quality and clean manufacturing.

a. Handholding support based on online self assessment, provision of Rs. 5.00 lakh for Gap analysis, Handholding, consultancy.

b. Development / pilot project implementation of Technology.

c. Assessment/Rating by empanelled Credit Rating Agencies/other Agencies valid for 4 years (Ministry of MSME will subsidize 80% of Micro, 60% of Small, 50% of Medium Enterprises’ Certification Fee: average 70% of Fee) (Assessment Fee Rs. 10,000/-& Rs 80,000/- per enterprise respectively for Desktop Assessment and ZED rating Complete Assessment). Payment to assessors by National Monitoring & Implementation Unit (NMIU) / Implementing Agency (IA) 50% on submission of assessment report and remaining 50% after issuance of certification.

d. Additional rating for Defence angle i.e. Defence ZED by empanelled Credit Rating Agencies/other Agencies valid for 4 years (Ministry of MSME will subsidize* 80% of Micro, 60% of Small, 50% of Medium Enterprises’ Certification Fee: average 70% of Fee) (Assessment Fee Rs. 40,000/- per enterprise).

e. Re-Assessment/Re-Rating by Credit Rating Agencies & Other Agencies (Ministry of MSME will subsidize 80% of Micro, 60% of Small, 50% of Medium Enterprises’ Certification Fee: average 70% of Fee) (Assessment Fee Rs. 40,000/- per enterprise).

Implementing Agencies:

Scheme shall be implemented through MSME DIs/TCs/ State Government institutions/departments/organizations of the respective State Government and such other institutions as empanelled / assigned work under the scheme.

C. Lean Manufacturing Competitiveness (LMC):

The main objective is to enhance manufacturing competitiveness of MSMEs through the application of various Lean Manufacturing Techniques by reducing wastes, increasing productivity and introducing innovative practices for improving the competitiveness.

a. A mini cluster ideally 10 units i.e., Special Purpose Vehicle (SPV) is formed for Lean interventions at unit level.

b. There is a provision of financial assistance upto Rs. 36.00 lakh (max.) per mini cluster. For a period of 18 months or till completion (GoI: Unit:: 80:20) is paid to Lean Manufacturing Consultant for intervention of Lean Techniques in the unit.

Implementing Agencies:

Scheme shall be implemented through MSME DJs/TCs/ State Government institutions/departments/organizations of the respective State Government and such other institutions as empanelled / assigned work under the scheme.

D. Design Expertise for manufacturing MSME sector:

a. The objective of this component is to enhance industry understanding and application of design to promote design as a value adding activity and integrate it into the main stream business and industrial processes of MSMEs.

b. Design Project

i. To facilitate MSMEs to develop new Design strategies and or design related products through design interventions and consultancy.

ii. (GoI contribution @ 75% for micro, 60% for SMEs for the project range Rs. 15 lakh to Rs. 40 lakh.)

c. Students Design Projects:

i. Students in the final year of Under Graduate (UG) / Post Graduate (PG) programmes from institutions recognized under the scheme arc eligible under this activities for the project work done for respective MSMEs.

ii. (GoI contribution @ 75% for the project cost of Rs. 2 lakh)

Implementing Agencies:

Scheme shall be implemented through MSME DIs/TCs/ State Government institutions/departments/organizations of the respective State Government and such other institutions as empanelled / assigned work under the scheme.

E. Digital MSME:

The prime objective of the scheme is to motivate MSMEs to adopt information and communication technology tools/ applications in their production and business processes in order to make them Digitally Empowered. Following major activities are proposed:

a. Development of e-Portal, software / Apps etc. to make MSMEs digitally empowered

b. Digital Literacy and c- marketing involving EDCs

c. Assistance to 1’1′ related items to various State Govt. Deptt. etc.

Implementing Agencies:

Scheme shall be implemented through MSMI:, DIs/TCs/ State Government institutions/departments/organizations of the respective State Government and such other institutions as empanelled / assigned work under the scheme.

F. Building Awareness on Intellectual Property Rights (IPR) for MSMEs:

The objective of the scheme is to enhance awareness of MSMEs about intellectual property rights to take measures for protecting their ideas and business strategics.

a. Gol Assistance for Patent / GI Registration/ [rade Mark is as under:

i. Domestic Patent 1.00 lakh
ii. Foreign Patent 5.00 lakh
iii. GI Registration 2.00 lakh
iv. Trade Mark 0. 10 lakh

(Patent reimbursement -100% (actual costs) 50% on grant at filing & 50% on grant of patent)

Implementing Agencies:

Scheme shall be implemented through MSME DIs/TCs/ State Government institutions/departments/organizations of the respective State Government and such other institutions as empanelled / assigned work under the scheme.

G. Support for Entrepreneurial and Managerial Development of MSMEs through Incubators:

The main objective of the scheme is to promote and support untapped creativity of individual and to promote adoption of latest technologies in manufacturing as well as knowledge based innovative MSMEs that seek the validation of their ideas at the proof of concept level. The scheme has following major activities:

a. The I lost Institution(III)/Business Incubator(BI) may get financial assistance @ up to Rs.15.00 lakh per idea

b. I-II/131 may be given financial assistance up to Rs. 1.00 cr. for purchasing plant and machinery in order to strengthen their R & D capabilities.

c. may be given financial assistance up to Rs. 1.00 cr. as SEED capital support for supporting deserving ideas for Start Ups(@ Rs. 20.00 lakh per start up)

Implementing Agencies:

Scheme shall be implemented through MSME DIs/TCs/ State Government institutions/departments/organizations of the respective State Government and such other institutions as empanelled / assigned work under the scheme.

Detailed operational guidelines will follow in due course.

This issues with the approval of competent authority.

(Mandeep Kaur)
Joint Development Commissioner

To:

1. Secretary, Department of Expenditure, North Block, New Delhi

2. SS&FA, M/o MSME, Udyog Bhawan, New Delhi

3. Advisor (PAMD) Room No. 244, NIT’ Aayog, Sansad Marg, New Delhi-110001

4. Advisor (Indus I&II), Room No. 214, NITI Aayog, Sansad Marg, New Delhi-110001

5. Chief Secretary (States/UTs)

6. All Commissioner/Director of Industries (States/UTs)

7. Chief Controller of Accounts, DIPP, Udyog Bhawan, New Delhi

8. Budget and Account Section, O/o/ DC (MSME)

9. All Directors, MSME-DIs/Director, MSME-Testing Centres/ All Branch Ms

10. Internal Circulation in the 0/o DC (MSME) as pr standard list.

11. PS to Hon’ble Minister (Minister of State, Independent Charge), MSME, Udyog Bhawan, New Delhi.

12. PPS to Secretary (MSME), Ministry of MSME, Udyog Bhawan, New Delhi.

13. PPS to AS&DC(MSME), Oto DC(MSME), Nirman Bhawan, New Delhi

14. PS to Joint Secretary & ADC (MSME), 0/o DC(MSME), Nirman Bhawan, New Delhi

15. PS to ADC, 0/o DC(MSME), Nirman Bhawan, New Delhi

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