In a big relief to the travel and tourism industry that was severely affected due to the COVID-19 pandemic, the government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) by three months up to June 30. It has also extended the scope of the scheme by launching ECLGS 3.0.
ECLGS 3.0 involves the extension of credit of up to 40 percent of total credit outstanding across all lending institutions as of February 29, 2020, from 20 percent earlier.
"The validity of ECLGS has been extended up to June 30 or till guarantees for an amount of Rs 3 lakh crore are issued," the finance ministry said in a statement on March 31.
The loans provided under ECLGS 3.0 will have a six-year tenor including a moratorium period of two years, it said.
The Rs 3 lakh crore ECLGS was launched as part of the Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May to mitigate the distress caused by coronavirus-induced lockdown, by providing credit to different sectors, especially micro, small and medium enterprises (MSMEs).
The scheme was initially valid till October 2020. FM Sitharaman later extended it till November 2020 and further until March 21, 2021, and included 26 stressed sectors identified by the Kamath Committee and the healthcare sector.
While ECLGS 1.0 had a 1-year moratorium period and a 4-year repayment period, ECGLS 2.0 had a 1-year moratorium period and a 5-year repayment period.
"The modifications introduced in the scheme while providing an incentive to member lending institutions to enable availability of additional funding facility to the eligible beneficiaries will go a long way in contributing to an economic revival, protecting jobs, and creating a conducive environment for employment generation," according to the statement.