Govt approves extension of CLCS-TUS scheme for MSMEs with 2,900cr outlay

The government Wednesday approved a three-year extension of the Credit Linked Capital Subsidy and Technology Up-gradation Scheme for MSMEs with total outlay of 2,900 crore.

The scheme has been approved for continuation beyond the 12th five-year Plan for three years from 2017-18 to 2019-20.

The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA).

"The scheme would be demand driven. But its coverage has been made more inclusive," an official statement said.

It will facilitate technology upgradation to MSMEs, improvement in quality of products, enhancement in productivity, reduction in waste, and it will promote a culture of continuous improvement.

The scheme aims at improving competitiveness of MSMEs by integrating various current schematic interventions aimed at up-grading technology through Credit Linked Capital Subsidy, hand holding for zero defect zero effect manufacturing, increasing productivity through waste reduction, design intervention, cloud computing, facilitation of intellectual property and nurturing new ideas.

Special provisions have been made in the scheme to promote entrepreneurship for SC/STs, women, hill states (Jammu & Kashmir, Himachal Pradesh & Uttarakhand), island territories (Andaman & Nicobar and Lakshadweep) and the aspirational districts/ LWE (Left-wing extremism) districts, as in these cases the subsidy will be admissible also for investment in acquisition /replacement of plant & machinery/equipment & technology up-gradation of any kind.

The objective of the scheme is to facilitate technology up-gradation in MSEs by providing an upfront capital subsidy of 15 per cent (on institutional finance of up to Rs 1 crore availed by them) for induction of well-established and improved technology in the specified 51 sub-sectors/products approved.