Union Cabinet chaired by the Prime Minister Narendra Modi has approved the enhancement in the limit of Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 50,000 crore from Rs. 4.5 lakh cr to Rs 5 lakh cr with the additional amount being earmarked exclusively for enterprises in hospitality and related sectors, a government release said.
The increase has been done on account of the severe disruptions caused by COVID-19 pandemic on hospitality and related enterprises, the release said.
ECLGS is a continuing scheme and the additional amount of Rs 50,000 cr would be made applicable to enterprises in hospitality and related sectors till validity of the scheme which is 31 March 2023.
ECLGS is an already operational scheme and on account of the disruptions caused by the COVID 19 pandemic on hospitality and related sectors, Government has specifically earmarked an amount of Rs. 50,000 crore for enterprises in these sectors.
The enhancement is expected to provide much needed relief to enterprises in these sectors by incentivising lending institutions to provide additional credit of up to Rs 50,000 cr at low cost. This inturn is expected to enable these business enterprises to meet their operational liabilities and continue their businesses.
Loans of about Rs. 3.67 Lakh crore have been sanctioned under ECLGS till 5 August 2022.
The ongoing pandemic has adversely impacted contact-intensive sectors, especially the hospitality and related sectors more severely. “Given their high employment intensity and their direct and indirect linkages with other sectors, their revival is also necessary for supporting overall economic recovery,” the release noted.
The Union Budget 2022-23 announced extension validity of ECLGS upto March, 2023 and increase in the limit of guaranteed cover of ECLGS by Rs 50,000 cr to total cover of Rs 5 lakh cr, with the additional amount being earmarked exclusively for the enterprises in hospitality and related sectors.