Subsidy should also be provided to MSEs who purchased machinery with their own funds, say Industries Associations

New Delhi, Oct 25 (KNN) In a meeting held with Nodal Banks/Agency, under the Chairmanship of Additional Development Commissioner, Micro Small and Medium Enterprises (MSME), Industry Associations including FISME have said that subsidy should also be provided to those MSEs who purchased machinery with their own fund i.e. without loan.

The association further said that MSEs must avail at least 70% institutional finance of total eligible investment towards the cost of plant and machinery for availing subsidy.

Guidelines on Credit Linked Capital Subsidy (CLCS) Scheme were discussed in a meeting.

Presently, under the scheme, MSEs are provided subsidy of 15% on institutional credit up to Rs 1.0 crore i.e. a subsidy cap of Rs 15.00 lakh for purchase of machinery in approved sectors/subsectors/technologies. 

Presently the subsidy released by the Government is kept in the form of a Term Deposit of equivalent amount for a period of three years with effect from the date of approval of the subsidy by the concerned PLI.  However, members in meeting suggested the date of disbursement of the last installment should be considered as the reference date for subsidy.

They were also discussion over MSEs availing subsidy under the CLCS scheme, where it was sought that MSE's vailing subsidy shouldn't be allowed to avail any other subsidy for technology up-gradation from the Central/State/U'T Government. However, associations suggested if States/UTs have scheme to give subsidy to promote MSEs in their States/UTs then MSEs should be allowed to avail subsidy from the State/U'T Government.

In case of merger of the entities or take-over of an entity by another, the new entity will not be entitled to get the subsidy. Five identified Service Sectors are proposed to include in the scheme.

The Federation of Indian Micro and Small & Medium Enterprises (FISME) too attended the meeting. (KNN Bureau)

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