Special Credit Linked Capital Subsidy Scheme (SCLCSS) for Scheduled Caste/ Scheduled Tribe

The Special Credit Linked Capital Subsidy Scheme (SCLCSS) for Scheduled Castes (SCs) and Scheduled Tribes (STs) aims to empower entrepreneurs. This initiative is designed to facilitate access to modern technology and boost the growth of Micro, Small, and Medium Enterprises (MSMEs) owned by SC/ST entrepreneurs. By providing financial assistance, the scheme ensures inclusive economic development in India.

This article will explain the Special Credit Linked Capital Subsidy Scheme (SCLCSS) and provide an overview for businesses looking to navigate the details of this initiative.

What is the SCLCSS?

The SCLCSS is a flagship initiative by the Ministry of Micro, Small, and Medium Enterprises (MSME) under the National SC & ST Hub (NSSH) scheme. It offers financial support to SC/ST MSMEs for technology enablement and business expansion. Below are its key highlights:

• Objective: To facilitate the purchase of plant and machinery by providing an upfront capital subsidy
• Eligibility: Available to new and existing SC/ ST MSMEs in both manufacturing and service sectors
• Scope: Covers all manufacturing and service sectors under the National Industrial Classification (NIC) code

By encouraging technology upgradation, the SCLCSS scheme aims to enhance productivity and efficiency in SC/ST enterprises.

Objective of SCLCSS

The SCLCSS scheme has been designed with the following objectives:

• Promote new enterprises among SC/ST entrepreneurs
• Support existing SC/ST businesses in their expansion
• Enable SC/ST enterprises to participate in public procurement
• Encourage the adoption of advanced technology to enhance competitiveness

By fulfilling these objectives, the SCLCSS facilitates the socio-economic upliftment of SC/ST entrepreneurs.

Features of the SCLCSS

The Special Credit Linked Capital Subsidy Scheme (SCLCSS) comes with several important features:

• Eligibility: Applicable for SC/ST Micro and Small Enterprises (MSEs) in the manufacturing and service sectors
• Subsidy scope: Provides financial support for purchasing new plant and machinery through term loans
• Sector coverage: Includes all manufacturing and service sectors as defined by the NIC code
• Implementation timeline: Subsidy eligibility begins from the issuance date of revised NSSH guidelines

This comprehensive support ensures that SC/ST entrepreneurs can access the tools they need for sustainable business growth.

Subsidy to SC/ST MSEs under SCLCSS

The SCLCSS scheme offers a 25% capital subsidy to SC/ST MSEs for technology enablement. Key details include:

• Maximum subsidy: Up to Rs. 25 lakhs on institutional finance of up to Rs. 1 crore
• Eligible purchases: New plant and machinery, equipment, and technology upgrades
• No sector-specific restrictions: Available for all sectors covered under the NIC code
• Loan requirement: Subsidy applicable only through term loans from Prime Lending Institutions (PLIs)

This provision aims to make modern technology more accessible to SC/ST entrepreneurs.

Eligible enterprises for SCLCSS

The SCLCSS scheme caters to a range of enterprises owned by SC/ST entrepreneurs. Eligible entities include:

• Sole proprietorships
• Partnerships
• Co-operative societies
• Private and public limited companies

These enterprises must engage in manufacturing or service activities to qualify for the scheme. By including a variety of ownership structures, the scheme ensures broad access to its benefits.

Eligibility criteria

To avail of the SCLCSS, SC/ST enterprises must meet specific criteria:

• Udyam registration: MSMEs must have a valid registration
• Medium-scale enterprises: Units transitioning from small to medium scale can apply for 3 years after graduation
• Loan-based eligibility: Assistance available for additional loans sanctioned under this scheme
• No refinance requirement: PLIs are not required to seek refinancing for term loans
• Subsidy overlap: Units can avail of other subsidies except for similar central government schemes for technology upgradation

These criteria ensure transparency and accessibility for eligible enterprises.

Application procedure for SCLCSS

SC/ST enterprises can apply for the SCLCSS through the following steps:

• Loan application: Submit required documents to the PLI from which the term loan is availed
• Submission to nodal agencies: The PLI uploads the application to the MSME’s dedicated MIS portal
• Approval process: Nodal agencies such as SIDBI and NABARD evaluate and approve the applications
• Subsidy disbursement: Upon approval, the subsidy is disbursed directly to the beneficiary’s account

This streamlined process ensures efficient access to financial assistance under the scheme.

Documents required for SCLCSS

Applicants must submit the following documents:

• Self-certified copy of Udyam Registration and GST
• PAN card of the SC/ST proprietor or partners
• Caste certificate of all partners or directors
• Partnership deed or Memorandum of Association
• Payment receipts and GST invoices for plant and machinery
• Testing reports attested by NABL/BIS laboratories
• Cancelled cheque of the enterprise’s current account

These documents ensure proper verification and transparency in the subsidy process.

Disbursement of subsidy under SCLCSS

The subsidy disbursement process follows a systematic approach:

• FIFO principle: Applications are processed on a first-come, first-served basis
• Retention period: Subsidy amount is kept as a Term Deposit Receipt (TDR) for 3 years
• Monitoring: Enterprises must maintain production or service operations for 3 years to qualify for the subsidy
• TDR liquidation: After 3 years, the subsidy amount is credited to the loan account upon verification

This process ensures accountability and long-term sustainability of the beneficiary units.

Conclusion

The Special Credit Linked Capital Subsidy Scheme (SCLCSS) is a game-changer for SC/ST entrepreneurs. By facilitating access to modern technology, it promotes the growth of MSMEs and fosters inclusive development. For SC/ST enterprises looking to upgrade their operations, a business loan from Bajaj Finserv can serve as a reliable financing option. With competitive interest rates and easy repayment options, these loans can complement the benefits of the SCLCSS.

Take the first step towards business success by exploring the Bajaj Finserv Business Loan today!