Special Credit Linked Capital Subsidy Scheme

To uplift entrepreneurship among India's Scheduled Caste (SC) and Scheduled Tribe (ST) communities, the Ministry of Micro, Small, & Medium Enterprises introduced the Special Credit Linked Capital Subsidy Scheme (SCLCSS). The scheme facilitates technology adoption, plant and machinery advancements, and builds modern enterprise skills by offering subsidies through institutional credit to the Micro, Small, & Medium Enterprises (MSMEs) run by SC/ST individuals.

Along with financial support, this scheme also bridges perpetual barriers in enterprise development.

The SCLCSS is a credit-linked capital subsidy scheme launched in 2017. This scheme targets to achieve enhanced participation from SC/ST communities in entrepreneurship and enterprise technology upgradation. Subsidies against purchase of new machinery, equipment, and access to modern technology for expansion. Interestingly, this scheme falls under the National SC/ST Hub (NSSH), which targets extensive participation from SC/ST enterprises.

The main details of the SCLCSS scheme are as follows:

• 25% subsidy provision for the SC/ST MSEs for the procurement of plant & machinery or any equipment through institutional credit.

• An overall ceiling of ₹25 Lakhs is permitted on the subsidy.

• The scheme supports both existing enterprises and newly established units run by eligible entrepreneurs.

• An upfront subsidy reduces the effective cost of adopting advanced, productivity-enhancing technologies.

The features and benefits of SCLCSS scheme are as follows:

• Subsidy on technology upgradation: Through the provided subsidy, this scheme decreases the financial burden on capital expansion, making advanced technology more accessible.

• Enhanced productivity: Modern equipment increases operational efficiency, product quality, and output.

• Support for both new and existing MSEs: Entrepreneurs launching new units or scaling current operations are eligible for assistance.

• Encouragement for technological innovation: Enterprises can integrate digitisation, automation, and sector-specific upgrades.

• Greater competitiveness: With improved machinery, companies can meet market standards, reduce production cost, and strengthen their presence.

In order to be eligible for the SCLCSS scheme, you must satisfy these conditions:

• The entity should be a manufacturing or service-based unit and fall under one of these categories: sole proprietorship, partnership, co-operative, or private/public limited company owned by SC/ST entrepreneurs.

• Possess a valid Udyam Registration Certificate to confirm MSME status.

• SC/ST-owned MSEs that have scaled up to medium enterprises within the past three years are still eligible.

Some exclusions applicable under the SCLCSS scheme:

• Units that claim subsidy under the SCLCSS scheme, cannot benefit from other subsidy schemes for the same claims.

• Only new machines and equipment are allowed to be purchased; no second-hand machinery.

• Costs related to civil works, sheds, or building construction.

• Equipment purchased on lease or hire.

To apply for the SCLCSS scheme, you can follow the steps below:

1. Visit the Prime Lending Institution (PLI) that will facilitate your term loan for the purchase of new plant or machinery.

2. Complete your application along with all required documents- such as Udyam Certificate, PAN, caste certificate, purchase invoices, etc. to the PLI.

3. The PLIs notified by the Ministry of MSME will then upload the claim application of the SC/ST MSEs on a dedicated MIS Portal to the nodal agency.

4. Once the loan is sanctioned and machinery purchase is finalised, the bank forwards the proposal to the designated nodal agency for subsidy release.

5. Upon approval, the subsidy amount is disbursed and credited to the borrower’s account, often kept as a Term Deposit Receipt (TDR) for 3 years.

The SCLCSS scheme is a supportive initiative by the Ministry of Micro, Small, & Medium Enterprises that empowers the SC/ST communities. Smoother access to machinery and equipment improves production quality and builds long-term competitiveness. For many MSEs, this scheme becomes a stepping stone towards sustainable growth and economic inclusion. If you are looking for other forms of financial assistance, check out the business loan and other product offerings from Bajaj Markets that caters to different entities, individuals, and communities.