Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country.
Ministry of Micro, Small & Medium Enterprises (M/o MSME) envision a vibrant MSME sector by promoting growth and development of the MSME Sector, including Khadi, Village and Coir Industries, in cooperation with concerned Ministries/Departments, State Governments and other Stakeholders, through providing support to existing enterprises and encouraging creation of new enterprises.
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. The Act seeks to facilitate the development of these enterprises as also enhance their competitiveness. It provides the first-ever legal framework for recognition of the concept of "enterprise" which comprises both manufacturing and service entities. It defines medium enterprises for the first time and seeks to integrate the three tiers of these enterprises, namely, micro, small and medium. The Act also provides for a statutory consultative mechanism at the national level with balanced representation of all sections of stakeholders, particularly the three classes of enterprises; and with a wide range of advisory functions. Establishment of specific funds for the promotion, development and enhancing competitiveness of these enterprises, notification of schemes/programmes for this purpose, progressive credit policies and practices, preference in Government procurements to products and services of the micro and small enterprises, more effective mechanisms for mitigating the problems of delayed payments to micro and small enterprises and assurance of a scheme for easing the closure of business by these enterprises are some of the other features of the Act.
The primary responsibility of promotion and development of MSMEs is of the State Governments. However, the Government of India, supplements the efforts of the State Governments through various initiatives. The role of the M/o MSME and its organizations is to assist the States in their efforts to encourage entrepreneurship, employment and livelihood opportunities and enhance the competitiveness of MSMEs in the changed economic scenario.
The schemes/ programmes undertaken by the Ministry and its organizations seek to facilitate/provide:
- Adequate flow of credit from financial institutions/banks;
- Support for technology upgradation and modernization;
- Integrated infrastructural facilities;
- Modern testing facilities and quality certification;
- Access to modern management practices;
- Entrepreneurship development and skill upgradation through appropriate training facilities;
- Support for product development, design intervention and packaging;
- Welfare of artisans and workers;
- Assistance for better access to domestic and export markets and
- cluster-wise measures to promote capacity-building and empowerment of the units and their collectives.
| Revised Classification applicable w.e.f 1st July 2020 |
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| Composite Criteria: Investment in Plant & Machinery/equipment and Annual Turnover |
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| Classification |
Micro |
Small |
Medium |
| Manufacturing Enterprises and Enterprises rendering Services |
Investment in Plant and Machinery or Equipment:
Not more than Rs.1 crore and Annual Turnover ; not more than Rs. 5 crore
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Investment in Plant and Machinery or Equipment:
Not more than Rs.10 crore and Annual Turnover ; not more than Rs. 50 crore
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Investment in Plant and Machinery or Equipment:
Not more than Rs.50 crore and Annual Turnover ; not more than Rs. 250 crore
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Credit Link Capital Subsidy Scheme for Technology Upgradation (CLCSS)
The scheme is operated by Ministry of Micro, Small & Medium Enterprises. The Scheme aims at facilitating technology upgradation by providing upfront capital subsidy to Micro, small and medium units, including tiny, khadi, village and coir industrial units, on institutional finance (credit) availed by them for modernization of their production equipment (plant and machinery) and techniques.
Pattern of Assistance: The scheme provides assistance in the following form.
Capital Subsidy:
- 15% of Loan amount sanctioned from Primary Lending Institutions
- Max Loan eligibility from Primary lending Institutions is Rs. 1 Crore.
- Subsidy Ceiling - Rs. 15 Lakhs
Eligible Technology for assistance under this scheme
Almost all technologies are covered under this scheme, however the following is the Ineligible components under this scheme
- The cost of equipments such as tools, jigs, dies, moulds and spare parts for maintenance and the cost of consumable stores
- The cost of installation of plant & machinery
- The cost of research & development equipment and pollution control equipment ( except where these have been approved for specific product/sub sector by the GTAB
- The cost of generation sets and extra transformer installed by the undertaking as per the regulations of the State Electricity Board (except where gas based generation sets have been approved for specific product/sub sector by the GTAB).
- The bank charges and service charges paid to the National Small Industries Corporation Ltd or the State Small Industries Corporation
- The cost involved in procurement or installation of cables, wiring, bus bars, electrical control panels (not those mounted on individual machines), oil circuit breakers or miniature circuit breakers which are necessarily to be used for providing electrical power to the plant & machinery or for safety measures
- The cost of gas producer plants ( except where these have been approved for specific product/sub sector by the GTAB)
- Transportation charges (excluding of salestax and excise) for indigenous machinery from the plac of manufacturing to the site of the factory
- Charges paid for technical knowhow for erection of plant & machinery
- Cost of such storage tanks which store raw materials, finished products only and are not linked with the manufacturing process
- Cost of fire fighting equipment
Important to remember:
- The technology which has been approved by the ministry is only eligible for the capital subsidy
- Every technology has prescribed cost norms, the capital subsidy is calculated based on these norms only
- The Governmental assistance cannot be utilized for the purposes other than for which it has been sanctioned
- If it is found that capital subsidy from the Government has been availed of on the basis of any false information, the industrial unit shall be liable to refund the Government the capital subsidy availed, along with interest to be charged from the date of disbursal to the date of refund.
- The beneficiary unit shall remain in commercial production for a period of at least three years after installation of eligible plant and machinery on which subsidy under CLCSS has been availed.
For more details about the scheme please contact us. We can help you with
- Arrangement of Finance Loans
- Provide advice on the eligibility of your project for the scheme
- Provide advice on the cost norms for various technologies as prescribed by the MSME Dept.
- Preparing Project report as per the norms of the scheme
- Assist you in the regular Inspections
The scheme would cover the following technology needs / products/sub - sectors:
- Biotech Industry
- Common Effluent Treatment Plant
- Corrugated Boxes
- Drugs and Pharmaceuticals
- Dyes and Intermediates
- Industry based on Medicinal and Aromatic plants
- Plastic Moulded/ Extruded Products and Parts/ Components
- Rubber Processing including Cycle/ Rickshaw Tyres
- Food Processing (including Ice Cream manufacturing)
- Poultry Hatchery & Cattle Feed Industry
- Dimensional Stone Industry (excluding Quarrying and Mining)
- Glass and Ceramic Items including Tiles
- Leather and Leather Products including Footwear and Garments
- Electronic equipment viz test, measuring and assembly/ manufacturing, Industrial process control Analytical, Medical, Electronic Consumer & Communication equipment etc.
- Fans & Motors Industry
- General Light Service(GLS) lamps
- Information Technology (Hardware)
- Mineral Filled Sheathed Heating Elements
- Transformer/ Electrical Stampings/ Laminations /Coils/Chokes including Solenoid coils
- Wires & Cable Industry
- Auto Parts and Components xxii) Bicycle Parts
- Combustion Devices/ Appliances
- Forging & Hand Tools
- Foundries - Steel and Cast Iron
- General Engineering Works
- Gold Plating and Jewellery
- Locks
- Steel Furniture
- Toys
- NonFerrous Foundry
- Sport Goods
- Cosmetics
- Readymade Garments
- Wooden Furniture
- Mineral Water Bottle
- Paints, Varnishes, Alkyds and Alkyd products
- Agricultural Implements and Post Harvest Equipment
- Beneficiation of Graphite and Phosphate
- Khadi and Village Industries
- Coir and Coir Products
- Steel Rerolling and /or Pencil Ingot making Industries
- Zinc Sulphate
- Welding Electrodes
- Sewing Machine Industry
Our Services in this area:
- Preparation of Detailed Project Reports (DPR)
- Layout Drawings
- Facilitating various permissions required from various Govt. Departments
- Error free application processing for various subsidies and incentives
- Facilitating the arrangement of subsidies and incentives from Govt. Departments
- Advisory on Purchase of Machinery / Technology and Civil works