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Govt Extended the Validity of ECLGS till September 30, 2021; ECLGS 4.0 Launched for On-Site oxygen generation

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Government expands Emergency Credit Line Guarantee Scheme for MSMEsOn 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 guarantee for an amount of Rs 3 lakh crore is issued.

  • Additionally, the scope of ECLGS has been widened through the introduction of ECLGS 4.0 for on-site oxygen generation.
  • National Credit Guarantee Trustee Company (NCGTC) will issue the Operational guidelines.

Room for Banks to Lend Rs 45,000 crore:

i.The disbursement under the Rs 3 lakh crore ECLGS scheme was also permitted up to December 31, 2021.

ii.Indian Banks’ Association Chief Executive Officer (CEO) Sunil Mehta stated that the validity extension will provide room for banks to disburse another Rs 45,000 crore out of Rs 3 lakh crore plan (Rs 2.54 lakh crore is covered already).


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 points about the Modifications in ECLGS:

ECLGS 4.0: 

Under which, a 100 percent guarantee cover was offered to hospitals/nursing homes/clinics/medical colleges for setting up on-site oxygen generation plants for loans up to Rs 2 crore with an interest rate capped at 7.5 percent.

ECLGS 3.0:

i.Under ECLGS 3.0, the loan outstanding ceiling of Rs 500 crore for eligibility was removed and added the Civil Aviation sector to be eligible under it.

ii.The maximum additional loans they can take under the scheme is limited to 40 percent of the outstanding loan, or Rs 200 crore, whichever is lower.

iii.ECLGS 3.0 six years, including a moratorium period of 2 years.

ECLGS 2.0:

i.ECLGS 2.0 had a loan tenure of five years with a 12-month moratorium on repayment of principal.

ECLGS 1.0:

i.Additional assistance up to 10 percent was enabled for loans given under ECLGS 1.0 (raising the total guaranteed loan to 30 percent) of outstanding as of February 29, 2020.

ii.The repayment period for restructured loans has been enhanced from 4 years to 5 years for loans under ECLGS 1.0 i.e. repayment of interest only for the first 24 months with repayment of principal and interest in 36 months thereafter.

Note – All the modifications in ECLGS are intended to enhance the utility and impact of ECLGS by providing additional support to Micro Small and Medium Enterprises (MSMEs).

Recent Related News:

The Ministry of Finance has extended the validity of the Emergency Credit Line Guarantee Scheme (ECLGS) by another 3 months till June 30, 2021, or till such time that an amount of INR 3 Lakh crore (Target Credit Line) is sanctioned under the Scheme. Additionally, the scope of ECLGS has been widened through the introduction of ECLGS 3.0.

About Ministry of Finance:

Union Minister – Nirmala Sitharaman (Constituency – Karnataka).
Minister of State – Shri Anurag Singh Thakur (Constituency – Hamirpur, Himachal Pradesh).