Emergency credit line on slow lane

„Only 2.73 lakh crore sanctioned so far

Under the Emergency Credit Line Guarantee Scheme, the government has issued guarantees worth Rs 2.14 lakh crore to

1.14 crore MSME borrowers. This is less than half of the overall ceiling of Rs

4.5 lakh crore provided under the scheme that ends in September.

The scheme was supposed to end on June 30, but was again extended by the government by three months to September 30 later.

According to Narayan Rane, Union minister for micro, small and medium enterprises, as on July 7,

2021, an amount of Rs 2.73 lakh crore has been sanctioned under the scheme, of which Rs 2.14 lakh crore has been disbursed. Total 1.14 crore borrowers have been issued guarantee under the scheme. The overall ceiling initially announced for ECLGS was Rs 3 lakh crore which was subsequently enhanced to Rs 4.5 lakh crore, he informed the Lok Sabha on Thursday.

The scheme is meant for MSME units, business enterprises, Mudra borrowers and those belonging to 26 stressed sectors identified by the Kamath committee. Hospitality, travel and tourism, leisure and sporting and civil aviation sectors too will receive guarantees under the scheme.

The scheme was further expanded to include the healthcare sector, benefitting existing hospitals, nursing homes, clinics, medical colleges and units manufacturing liquid oxygen, oxygen cylinders and the like.

The government has capped the interest rate under the scheme at 9.25 per cent for banks and financial institutions and 14 per cent for non-banking financial institutions. This scheme also offers a one-year moratorium on payment of principal component.