Information and Broadcasting Minister Anurag Thakur announced on August 17 that the extension of the Emergency Credit Line Guarantee Scheme (ECLGS) from Rs 4.5 lakh to Rs 5 lakh crore had received Union Cabinet approval. According to the minister, the extra money will only be available for the travel, tourism and hospitality industries. After the pandemic, the ECLGS program was set up to help small businesses suffering from the unprecedented decline in economic activity. Since then, more industries are also included in the program.Read also – COVID-19: scientists discover the main key to fighting all variants. all you need to know
Cabinet approved improvement of emergency credit line guarantee scheme limit of Rs 50,000 crore for travel, tourism and hospitality sector: Union Minister Anurag Thakur
— ANI (@ANI) August 17, 2022
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Nirmala Sitharaman, the finance minister, said in the budget for 2022-2023 that the ECLGS would remain in force until March 2023 and the maximum guaranteed cover would be increased by Rs 50,000 crore. Also Read – Center approves Rs 50,000 crore under ECLGS for hospitality sector, industry welcomes move
What is the Emergency Credit Line Guarantee Scheme (ECLGS)?
Following the outbreak of COVID-19, the ECLGS was introduced in May 2020 to help various industries, especially those in the MSME segment, obtain credit at a reduced rate of 7%. Till August 5, 2022, loans of around Rs 3.67 lakh crore have been approved under the ECLGS. Loans granted under the ECLGS provide lending institutions with full security for the credit facilities they extend to qualified borrowers under the scheme.
India.com spoke with Nishant Pitti, CEO and co-founder of EaseMyTrip, the ECLGS program for the travel and hospitality industry. He said: “This is good news for MSMEs in the travel, tourism and hospitality industry as it will enable liquidity and facilitate operations due to the expansion of the ECLGS. This will further stimulate the recovery of the industry.
The improvement is expected to offer much needed help to businesses in these industries by encouraging lending institutions to offer additional credit of up to Rs 50,000 crore at cheap cost.