Moneycontrol PRO
UPCOMING EVENT:Attend Traders Carnival Live. 3 days 12 sessions at Rs.1599/-, exclusive for Moneycontrol Pro subscribers. Register now!
you are here: HomeNewsBusiness

Centre extends emergency credit scheme till March next year

Further, the last date of disbursement under the scheme has also been extended June 30, 2022.

September 29, 2021 / 09:15 PM IST
Representative image: Reuters

Representative image: Reuters

Finance Ministry on September 29 extended the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) for six months till March 2022.

"With a view to support various businesses impacted by the second wave of COVID 19 pandemic, it has been has decided to extend the timeline of Emergency Credit Line Guarantee Scheme (ECLGS) till 31.03.2022 or till guarantees for an  amount of Rs 4.5 lakh crore are issued under the scheme, whichever is earlier," Finance Ministry said.

Further, the last date of disbursement under the scheme has also been extended  June 30, 2022.

The  Rs. 3 lakh crore ECLGS was introduced to mitigate the stress caused by the Covid-19 pandemic on several sectors across the country. The scheme was  launched as part of the Rs. 20 lakh crore Covid-19 relief package called the Atmanirbhar Bharat Abhiyan in May 2020.

Earlier this year, the government has enhanced the limit to Rs. 4.5 lakh crore and extended the scheme's validity by 3 months from June 30 to September 30 this year.

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

It aims  provide 100 percent guaranteed coverage to the banks, non-banking financial institutions (NBFCs) and other lending institutions in order to enable them to extend emergency credit to business entities that have suffered due to the Covid-19 pandemic and are struggling to meet their working capital requirements.

As of September 24, 2021, Rs 2.86 lakh crore in loans has been sanctioned, the Ministry said.

Out of total guarantees issued, about 95 percent of the guarantees issued are for loans sanctioned to Micro, Small and Medium Enterprises, it said.

The government also announced some modifications in the scheme to enable support to businesses impacted by the second wave of COVID.

"Existing borrowers under ECLGS 1.0 & 2.0 would be eligible for additional credit support of upto 10 percent of total credit outstanding as on 29.02.2020 or 31.03.2021, whichever is higher," it said.

Further, the businesses which have not availed availed credit under ECLGS 1.0 or 2.0, can avail credit  support  of upto 30 percent of their credit outstanding as on 31.03.2021 and sectors under ECLGS 3.0 avail credit support up to 40 percent of their credit outstanding as on 31.03.2021, to the maximum of Rs.200 crore per borrower.

The ECLGS was initially announced for the MSME sector but later with various revisions its scope was expanded to 26 stressed sectors identified by the Kamath Committee, healthcare sector, business enterprises in the hospitality, travel and tourism and aviation.

Ramamurthy, member, All India Council of Association of MSMEs (AICA) which represents 170 MSME associations across the country said that an extension of the scheme is a welcome step.

"Why close the scheme when the amount is not exhausted. The economy is still in the recovery phase so an extension would only help many industries to avail it which have not been able to," he said.

Yogesh Pawar, Chairman Association of Inspiring Syndicate of Entrepreneurs said, "The disbursement has been slow in the scheme at the end of banking institutions and the Government has not been able to meet the targeted amount for MSMEs. This is the thought to be the primary reason for the extension in the scheme till March 2022."

The Associations works in the space of training and uplifting of MSMEs.

Pawar also observed that scheme has been a boon for MSMEs during post Covid period, as they have been struggling with working capital requirement and the increase in raw material prices at the same time.​

K E Raghunathan, Convenor, Consortium of Indian Associations said, "I would suggest the extension should be till the time the amount is finished."

Raghunathan noted that 52 sectors have been identified that are almost wiped off with the second Covid outbreak which are predominantly run by micro and small entrepreneurs.

"These sectors include salons, gyms, cinema theatres, construction contractors, sheet metal manufacturers, paper manufacturers, street vendors, auto ancillaries, freight forwarding, exhibition and event management firms, and more," he added.

 
Shreeja Singh

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark