Guaranteed coverage will be extended from ₹50,000 crore to a total of ₹5,000,000,000 with the most recent focus on sectors such as hospitality
NEW DELHI: Finance Minister Nirmala Sitharaman announced in the budget on Tuesday that the Emergency Line of Credit Guarantee (ECLGS) program for small businesses will be extended for one year until March 2023. She said the guaranteed coverage would be extended by ₹50,000 crores for a total of ₹5 lakh crore with the latest focus on sectors such as hospitality.
HT reported on December 10 that the government may extend the ₹Sovereign guaranteed credit facility of 4.5 lakh crore for small businesses until next fiscal year as the pandemic is not yet over and the scheme has successfully provided liquidity support to over 10 million businesses , protecting approximately 54.5 million jobs.
The ECLGS, which was due to end on March 31, has now been extended until the next financial year, as several small businesses, especially in the service sector, are still in need of such liquidity support following the news. variants of covid.
HT reported on December 10 that the extension of the ECLGS with certain modifications is under consideration and that an announcement to this effect is possible in the budget. A body of approximately ₹1.6 lakh crore is still available under the scheme.
The ECLGS is one of the key elements of the ₹A 20 lakh crore economic stimulus package under the Atmanirbhar Bharat Abhiyan (Indian Self-Reliance Campaign) launched in mid-May last year offering additional working capital financing in the form of a loan to term to MSMEs and professionals. Initially, his corpus was ₹3 lakh crore, which was raised to ₹4.5 lakh crore in June this year after the second wave of Covid-19 when Sitharaman announced the fourth stimulus package worth ₹$6.29 million.
Under the ECLGS, loans with a value greater than ₹2.82 lakh crore has been sanctioned to about 11.5 million borrowers so far, and ₹2.28 lakh crore was disbursed to the benefit of 9.52 million units. “The program was able to provide much-needed cash support to small units impacted by the pandemic. Although the economy has rebounded, many of these companies, especially those in the service sector, still need such credit support, as the potential threat of new variants cannot be completely ruled out,” an official said. on condition of anonymity.