Union Finance Minister Nirmala Sitharaman on June 28 announced eight economic relief measures, of which four are “absolutely new and one is specific to health infrastructure”.
With a focus on health and medical infrastructure in all tier-two and tier-three cities, the Finance Ministry announced a Rs 1.1 lakh crore guarantee scheme for COVID-19-hit sectors. Out of the Rs 1.1 lakh crore, the health care sector will get Rs 50,000 lakh crore, while the others will get Rs 60,000 lakh crore.
Additionally, with an aim to provide further economic relief to micro, small and medium enterprises (MSMEs) amid the ongoing COVID-19 pandemic, the Centre on June 28 expanded the financial support being provided under the Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 1.5 lakh crore.
ECLGS -- the government's flagship scheme to help businesses hit by the pandemic -- will now have a total outlay of Rs 4.5 lakh crore, up from the earlier Rs 3 lakh crore, Finance Minister Nirmala Sitharaman announced on June 28.
"The overall cap of admissible guarantee has been raised from Rs 3 lakh crore to Rs 4.5 lakh crore," Nirmala Sitharaman said.
The Finance Minister further announced that ECLGS 1.0,2.0, and 3.0 combined have resulted in the disbursal of Rs 2.69 lakh crore to 1.1 crore units by 12 public sector banks, 25 private sector banks, and 31 non-banking financial corporations.
Contact intensive sectors have already been covered by this scheme and will continue to benefit from the ECLGS. The sector has got Rs 4,000 crore in aid from the government through this window so far.
FM Nirmala Sitharaman also said that the list of admissible guarantees and loan amount has been proposed to be increased above the existing level of 20 percent of outstanding on each loan.
“Sector-wise details will be finalised as per evolving needs,” she added.
The Scheme was initially launched as part of the Rs 20 lakh crore COVID-19 relief package called the Aatmanirbhar Bharat Abhiyaan in May 2020.
It had aimed at providing Rs 3 lakh crore worth of collateral-free, government-guaranteed loans to micro, small and medium enterprises (MSMEs) across India to mitigate the distress caused by the coronavirus-induced lockdown.
It permitted emergency credit to businesses from banks and non-banking financial corporations by up to 20 percent of the entire outstanding credit as of February 20, 2020. These had a one-year moratorium period and a four-year repayment period.
The second avatar of the scheme termed ECLGS 2.0 had been inaugurated in November 2020 to support 26 stressed sectors identified by the Kamath Committee and the healthcare sector. In its third major overhaul, the emergency credit limit was raised to the tune of 40 percent of the entire outstanding credit.
The Centre had last expanded the Scheme on May 30, when its scope was widened to cover the civil aviation sector and loans for oxygen generation plants. Its validity was also extended to September 30, 2021, or till guarantees for an amount of Rs 3 lakh crore are issued. Likewise, disbursement under the scheme was permitted up to December 31, 2021.