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Special Credit Linked Capital Subsidy Scheme: MSME

  • 20 Nov 2021
  • 5 min read

Why in News

Recently, the Ministry of Micro, Small and Medium-sized Enterprises (MSMEs) launched the Special Credit Linked Capital Subsidy Scheme (SCLCSS) for the services sector.

Key Points

  • About:
    • The scheme will help in meeting the technology-related requirements of enterprises in the services sector.
    • It has a provision of 25% capital subsidy for procurement of plant and machinery and service equipment through institutional credit to the Scheduled Caste - Scheduled Tribe MSMEs without any sector-specific restrictions on technology up-gradation.
  • Significance:
    • It will facilitate technology up-gradation to MSEs, improvement in Quality of services by MSMEs, enhancement in productivity, reduction in waste and shall promote a culture of continuous improvement.
    • It will also promote the innovation, digital empowerment and design interventions of MSMEs.
  • Credit Linked Capital Subsidy Scheme for Technology Upgradation:
    • It was launched in 2000.
    • The objective of the Scheme is to facilitate technology up-gradation in MSEs by providing an upfront capital subsidy of 15% (on institutional finance of upto Rs 1 crore availed by them) for induction of well-established and improved technology in the specified 51 sub-sectors/products approved.
    • In other words the major objective is to upgrade their plant & machinery with state-of-the-art technology, with or without expansion and also for new MSEs which have set up their facilities with appropriate eligible and proven technology duly approved under scheme guidelines.

Other Initiatives to Promote MSME Sector

  • The Ministry of Micro, Small & Medium Enterprises (M/o MSME) envisions a vibrant MSME sector by promoting growth and development of the MSME Sector, including Khadi, Village and Coir Industries.
  • The Micro Small and Medium Enterprises Development (MSMED) Act was notified in 2006 to address policy issues affecting MSMEs as well as the coverage and investment ceiling of the sector.
  • Prime Minister’s Employment Generation programme (PMEGP): It is a credit linked subsidy scheme, for setting up of new micro-enterprises and to generate employment opportunities in rural as well as urban areas of the country.
  • Scheme of Fund for Regeneration of Traditional Industries (SFURTI): It aims to properly organize the artisans and the traditional industries into clusters and thus provide financial assistance to make them competitive in today's market scenario.
  • A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE): The scheme promotes innovation & rural entrepreneurship through rural Livelihood Business Incubator (LBI), Technology Business Incubator (TBI) and Fund of Funds for start-up creation in the agro-based industry.
  • Interest Subvention Scheme for Incremental Credit to MSMEs: It was introduced by the Reserve Bank of India wherein relief is provided upto 2% of interest to all the legal MSMEs on their outstanding fresh/incremental term loan/working capital during the period of its validity.
  • Credit Guarantee Scheme for Micro and Small Enterprises: Launched to facilitate easy flow of credit, guarantee cover is provided for collateral free credit extended to MSMEs.
  • Micro and Small Enterprises Cluster Development Programme (MSE-CDP): It aims to enhance the productivity and competitiveness as well as capacity building of MSEs.
  • CHAMPIONS portal: It aims to assist Indian MSMEs march into the big league as National and Global CHAMPIONS by solving their grievances and encouraging, supporting, helping and hand holding them.
  • MSME Samadhan: It enables them to directly register their cases about delayed payments by Central Ministries/Departments/CPSEs/State Governments.
  • Udyam Registrations Portal: This new portal assists the government in aggregating the data on the number of MSMEs in the country.
  • MSME SAMBANDH: It is a Public Procurement Portal. It was launched to monitor the implementation of the Public Procurement from MSEs by Central Public Sector Enterprises.

Source: PIB

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