Technology Upgradation Capital Subsidy
Credit-linked capital subsidy on plant and machinery when you modernise — claimed against a sanctioned term loan, from the central window and your state's policy
Quick Stats
About Technology Upgradation Capital Subsidy
When an MSME replaces old machinery with better technology, part of that capital cost can come back as a subsidy you never repay. It is credit-linked: the subsidy rides on a term loan from an eligible lender, and is credited against that loan rather than paid to you in cash.
The central window, run by the Ministry of MSME through nodal banks, has historically paid 15% of eligible plant and machinery cost, with a ceiling that works out to around ₹15 lakh of subsidy. Eligibility is tied to specified products and technologies rather than any machine you choose to buy.
The central scheme has opened and closed by plan period, so the live route is often your state's industrial policy instead — most states run their own capital subsidy on plant and machinery, and several are more generous than the central rate. Which window is actually open for your sector and state is the first thing we check.
One rule matters more than all the numbers: apply before you buy. A capital subsidy is claimed against a sanctioned term loan, and paying for the machinery first can forfeit the claim entirely. Talk to us before you place the order, not after.
Money You Keep
A capital subsidy is not a loan. It reduces the cost of the asset permanently, and there is nothing to repay.
Credit-Linked
The subsidy attaches to a term loan from an eligible lender. Buying machinery from your own funds usually forfeits the claim.
Central Plus State
State industrial policy runs its own capital subsidy. Both can often be claimed on the same investment, and are assessed together.
Timing Decides It
Claims are time-bound from the date of investment, and several windows require sanction before purchase. Sequence is everything.
Success Stories
"Two CNC machines against a CGTMSE-backed term loan, with the state capital subsidy claimed on top."
Shakti Engineering Works
CNC Job Work
Funded: ₹68 Lakhs
"We were about to pay for the machine ourselves. Being told to get the sanction first saved the entire claim."
Anand Plastics
Injection Moulding
Funded: ₹42 Lakhs
"Grading and packing line upgraded, output nearly doubled, and the subsidy came off the loan account."
Krishna Agro Processing
Spice Grinding & Packing
Funded: ₹35 Lakhs
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