To support the various businesses impacted by the second wave of COVID-19, the government has decided to extend the timeline of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 31, 2022, or till guarantees for an amount of Rs 4.5 lakh crore are issued under the scheme, whichever is earlier.
- The last date of disbursement under the scheme was also extended to June 30, 2022.
- Since its launch, ECLGS has extended relief to over 15 crore Micro, Small and Medium Enterprises (MSMEs) and businesses for meeting their operational liabilities and restarting their businesses that were affected by COVID-19.
- As of 24th September 2021, loans sanctioned under ECLGS have crossed Rs. 2.86 lakh crore and out of which, about 95 percent of the loans were issued for MSMEs.
Background: In May 2020, Union Cabinet chaired by Prime Minister Narendra Modi approved ECLGS Scheme. It was announced as part of the Government’s ‘Atma Nirbhar’ or self-sufficiency package.
Key Modifications in ECLGS:
i.Additional assistance up to 10 percent was enabled for loans given under ECLGS 1.0 1.0 & 2.0 as of February 29, 2020, or March 31, 2021, whichever is higher.
ii.Businesses who have not availed of assistance under ECLGS (ECLGS 1.0/2.0) are allowed to avail credit support of up to 30 percent of their credit outstanding as of March 31, 2021.
iii.Under ECLGS 3.0, the maximum additional loans that could be taken is limited to 40 percent of the outstanding loan, or Rs 200 crore, whichever is lower.
iv.Incremental credit can be availed within these limits by existing ECLGS borrowers whose eligibility increased because of a change in the cut-off date to March 31, 2021, from February 29, 2020.
v.Borrowers who have availed assistance under ECLGS and whose credit outstanding as of March 31, 2021, is higher than that on February 29, 2020, will be eligible for incremental support within the cap stipulated under ECLGS 1.0, 2.0 or 3.0.
Recent Related News:
On May 30, 2021, the Ministry of Finance has extended the validity of the Emergency Credit Line Guarantee Scheme (ECLGS) for another 3 months till September 30, 2021, or till a guarantee for an amount of Rs 3 lakh crore is issued.
About Ministry of Finance:
Union Minister – Nirmala Sitharaman (Karnataka)
Minister of State (MoS) – Pankaj Chaudhary (Maharajganj, Uttar Pradesh), Bhagwat Kishanrao Karad (Constituency – Maharashtra)