Centre plans sops for electronics cos THE INDUSTRY has been seeking that it should be able to get term loans on par with internationally acceptable rates.

New Delhi, Jan 14: The government is considering credit guarantee for term loans of up to `100 crore as well as interest subsidy on loans up to `1,000 crore for electronic manufacturing companies under the new policy in works.

According to official sources, the Ministry of Electronics and IT has proposed “credit guarantee fund” (CGF) scheme and “interest subvention scheme” (ISS) to boost electronics manufacturing ecosystem in the country under new National Policy on Electronics in works.

“There is proposal to provide credit guarantee on term loans for projects up to Rs 100 crore per borrowing unit. This will not require any collateral security and third party guarantee, for setting up a new electronics manufacturing unit or considerable expansion of an existing electronics manufacturing pant. The cover will vary on case to case basis, depending upon investments...,” an

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official source told

According to the proposal, the government will provide up to 50 per cent guarantee cover of the sanctioned loan amount, the source said.

“It is proposed that Meity shall create a fund with the nodal agency for providing guarantees for the term loans. Meity shall provide funds in advance from its annual budgetary allocation to the nodal agency for utilisation under the scheme,” the source added.

The CGF will be created with a corpus of `1,000 crore to be contributed by the government and a review will be undertaken after second year to assess the corpus size in relation to the response from the sector, as per the proposal.