The Ministry of Micro, Small and Medium-sized Enterprises (MSMEs) recently announced the initiation of the Special Credit Linked Capital Subsidy Scheme (SCLCSS). This scheme is specifically targeted towards the service sector, designed to assist in meeting their technological needs.
The Special Credit Linked Capital Subsidy Scheme
The SCLCSS provides a 25% capital subsidy for the procurement of plant and machinery and service equipment through institutional credit. The scheme, which doesn’t impose sector-specific restrictions, is available to Scheduled Caste and Scheduled Tribe MSMEs looking to upgrade their technology. It aims to enhance technology across MSEs, promote consistent improvements, reduce waste and improve overall quality of services provided by MSMEs. Additionally, the scheme entails boosting innovation, digital empowerment, and design interventions within MSMEs.
Credit Linked Capital Subsidy Scheme for Technology Upgradation
First introduced in 2000, this scheme’s primary objective is promoting technology upgradation among MSEs. Beneficiaries can access an upfront capital subsidy of 15% on institutional finance of up to Rs 1 crore. This financial assistance enables MSEs to modernize their plant and machinery with state-of-the-art technology, facilitating expansion and fostering new MSEs with approved, eligible, and proven technology.
Other Initiatives Driving the MSME Sector
Various schemes and regulatory changes have been introduced over the years to support the progression and development of the MSME sector. The Micro Small and Medium Enterprises Development Act, 2006, was implemented to address policy issues affecting MSMEs, outlining the coverage and investment ceiling of the sector.
The Prime Minister’s Employment Generation programme offers credit linked subsidy for the establishment of new micro-enterprises while also creating employment opportunities across rural and urban India. Meanwhile, the Scheme of Fund for Regeneration of Traditional Industries focuses on organizing artisans and traditional industries into clusters, providing financial assistance to enhance their market competitiveness.
The scheme for Promoting Innovation, Rural Industry & Entrepreneurship encourages rural entrepreneurship through its Livelihood Business Incubator, Technology Business Incubator, and a dedicated Fund of Funds for start-ups in the agro-based industry.
Support Schemes and Portals
Several schemes provide relief to MSMEs, including the Interest Subvention Scheme for Incremental Credit to MSMEs, which offers up to 2% interest relief. The Credit Guarantee Scheme ensures easy credit flow by providing guarantee cover for collateral-free credits extended to MSMEs. The Micro and Small Enterprises Cluster Development Programme aims to boost productivity and competitiveness, along with capacity building of MSEs.
In terms of digital platforms, the CHAMPIONS portal serves as a grievance redressal system and provides encouragement and support to MSMEs. The MSME Samadhan enables MSMEs to register cases about delayed payments, while the Udyam Registrations Portal assists in aggregating the data on the number of MSMEs in the country. Finally, the MSME SAMBANDH is a Public Procurement Portal monitoring the implementation of Public Procurement from MSEs by Central Public Sector Enterprises.