Design Scheme Under MSME Innovative Scheme 2026

This scheme offers a 25% capital subsidy to Scheduled Caste (SC) and Scheduled Tribe (ST) Micro and Read More... Small Enterprises (MSMEs) for buying plant and machinery or equipment through bank loans. Read less

Details

Are you an entrepreneur from the Scheduled Caste (SC) or Scheduled Tribe (ST) community looking to expand your business or start a new venture? The Indian government has a scheme that could help you. The Special Credit Linked Capital Subsidy Scheme (SCLCSS) aims to provide financial support to SC/ST owned MSMEs.

What Is This Scheme?

The Special Credit Linked Capital Subsidy Scheme (SCLCSS) is a part of the National Scheduled Caste and Scheduled Tribe Hub (NSSH) initiative. It's designed to boost the growth of existing SC/ST MSMEs and encourage new businesses within these communities. Under this scheme, eligible SC/ST entrepreneurs can receive a 25% capital subsidy when they take a bank loan to purchase plant and machinery or equipment.

Who Can Benefit From This Scheme?

This scheme is for SC/ST entrepreneurs who own and operate Micro and Small Enterprises (MSMEs). This includes sole proprietorships, partnerships, cooperatives, and private or public limited companies. The business can be in either the manufacturing or service sectors.

Why This Scheme Is Important

The SCLCSS plays a crucial role in empowering SC/ST entrepreneurs by providing them with essential financial aid. By offering a significant capital subsidy, it makes it easier for these businesses to invest in modern machinery and equipment, thus enhancing their production capacity, improving efficiency, and fostering overall growth and competitiveness in the market. This, in turn, helps in creating more employment opportunities and promoting inclusive economic development.

Objective

This scheme offers a 25% capital subsidy to Scheduled Caste (SC) and Scheduled Tribe (ST) Micro and Small Enterprises (MSMEs) for buying plant and machinery or equipment through bank loans.

Benefits

Design Project:Financial assistance under this activity will be utilised for engagement of design consultants for design interventions and expenses pertaining to development of prototype/product. For the design projects approved for any MSME, 75% (Micro) and 60% (Small & Medium) of the total project cost will be contributed by Government of India, up to a maximum of ₹ 40,000,00/- and the remaining project cost will be borne by MSMEs and deposited to the IA.

The total project cost will be provided as a grant in 3 stages:

Stage 1: Strategy & Concept- 40%

Stage 2: Detail Design - 30%

Stage 3: Successful Completion of the prototype/product and Final Report submission - 30%.

Student Project:This component supports design work of bona-fide students by providing financial assistance up to ₹ 2,50,000/-. For the student design projects approved for any MSME,75% of the total project cost will be contributed by Government of India, up to a maximum of ₹ 2,50,000/- and the remaining project cost will be borne by MSME and deposited to the IA.

Sources and references

Guidelines

Eligibility Criteria

Ownership: The business must be owned by Scheduled Caste (SC) or Scheduled Tribe (ST) entrepreneurs. This applies to sole proprietorships, partnerships, co-operative societies, private limited companies, and public limited companies.
Business Type: Enterprises in both manufacturing and service sectors are eligible.
Registration: Must have a valid Udyam Registration.
Growth Stage: The scheme is for SC/ST units that have recently transitioned or are transitioning from micro/small to medium scale within 3 years of this transition. It also covers new industries that become medium scale due to a loan.
Loan Tenure: The term loan sanctioned for the purchase of machinery/equipment must be for a minimum of three years, including any moratorium period.
Exclusions: Industries listed under the RED category as per the Ministry of Environment & Forests' classification are not eligible.

How To Apply

The application process typically involves securing a term loan from an eligible financial institution. Once the loan is sanctioned and disbursed for the purchase of eligible machinery or equipment, the financial institution will process the subsidy claim on your behalf. Here's a general outline:

Secure a Term Loan: Approach a bank or financial institution to apply for a term loan for the purchase of plant & machinery or equipment.
Loan Sanction and Disbursement: Ensure your loan is sanctioned and disbursed for the specified purpose.
Subsidy Claim Processing: The lending bank will submit the subsidy claim online to the NSSH Cell.
Disbursement: The NSSH Cell will disburse the subsidy to the eligible beneficiary unit on a First-In-First-Out (FIFO) basis.

For detailed information and to find the official application portal or relevant contact details, please refer to the official notifications and website of the Ministry of Micro, Small & Medium Enterprises and the National Small Industries Corporation (NSIC).

Documents Required

When applying for this scheme, be prepared to submit the following self-certified copies unless original documents are explicitly requested:

Udyam Registration Certificate (UAM) and GST details.
PAN Card: For proprietorships, the PAN card of the SC/ST proprietor is required. For other entities, the firm's PAN card is needed.
Caste Certificate: Proof of belonging to SC/ST for the proprietor, partners, or directors.
Shareholding Details: For partnership firms, LLPs, and private limited companies, details of shareholding are needed to confirm SC/ST ownership (SC/ST entrepreneur's shareholding must be over 51%). This includes the Partnership Deed or Memorandum and Articles of Association.
Payment Receipts and GST Invoice: For any testing services availed, proof of payment to the testing center or laboratory.
Testing Report: NABL/BIS attested final testing report from the laboratory.
Proof of Reimbursement: If any previous assistance was received under the scheme in the same financial year from NSSHO/NSIC through PFMS.
Cancelled Cheque: A cancelled cheque of the enterprise's current account from which testing charges were debited.

FAQ’s

What exactly is the Special Credit Linked Capital Subsidy Scheme (SCLCSS)?

The SCLCSS is a government initiative designed to support Micro and Small Enterprises (MSMEs) owned by individuals from Scheduled Caste (SC) and Scheduled Tribe (ST) communities. It provides a 25% capital subsidy on loans taken to purchase plant and machinery or equipment. This helps existing businesses expand and encourages new SC/ST entrepreneurs to set up their ventures.

Can I get this subsidy if I want to replace old machinery?

Yes, the subsidy is admissible for the investment made in acquiring or replacing plant & machinery or equipment, as well as for technology upgrades, provided it's financed through institutional loans. However, please note that second-hand or fabricated machinery is not eligible for this subsidy.

Which government ministry is responsible for this scheme?

This scheme has been introduced by the Ministry Of Micro, Small & Medium Enterprises.

Is the subsidy available for medium-scale businesses too?

No, the SCLCSS is specifically for Micro and Small-Scale Enterprises (MSMEs), both new and existing ones. It is not applicable to medium or large-scale enterprises.

What are the key benefits offered by the SCLCSS?

The main benefit is a 25% capital subsidy on institutional finance used to buy plant & machinery or equipment. The maximum subsidy amount you can receive is ₹ 25,00,000/-. A significant advantage is that this subsidy can be availed across various sectors, with no specific industry restrictions.

Are there any industries that are not covered by the scheme?

Yes, while the scheme generally covers most manufacturing and service sectors, industries classified under the RED category by the Ministry of Environment & Forests are not eligible for the subsidy.

If I'm already getting some other subsidy, can I still apply for this one?

Units that receive subsidy under SCLCSS can generally avail other subsidies as well. However, you cannot claim any other Central Government or State Government subsidy specifically for technology upgradation that overlaps with this scheme.

How is the subsidy actually paid to the business owner?

Banks that provide the term loan will submit claims online to the NSSH Cell. The NSSH Cell then processes these claims and disburses the subsidy to the eligible units. Both the bank and the NSSH Cell follow a 'First-In-First-Out' (FIFO) principle for processing and disbursement to ensure fairness.

Does the scheme apply to brand new businesses?

Yes, the scheme is applicable for new Micro and Small Enterprises (MSMEs) owned by SC/ST entrepreneurs as well.

What is the minimum duration for the term loan to qualify for this subsidy?

To be eligible for the subsidy, the term loan sanctioned for purchasing machinery or equipment must have a minimum tenure of three years, which includes any moratorium period.