New Delhi: Union Finance Minister Nirmala Sitharaman in her 2022 budget speech announced the extension of the Emergency Credit Line Guarantee (ECLGS) scheme until March 2023. Presenting her fourth budget, Ms. Sitharaman said the coverage of the scheme would be extended from Rs 50,000 crore to Rs 5 million.
An additional amount has been earmarked exclusively for the hospitality and related sectors and the government will take steps to make the MSME (micro, small and medium-sized enterprises) sector more resilient, she added.
The government had launched the program in view of the Covid-19 pandemic to provide credit facilities to business enterprises, small and medium enterprises (MSMEs).
In September last year, the Center had increased the funds allocated under the ECLGS from Rs 3 lakh crore initially to Rs 4.5 lakh crore and also extended the scheme until March 2022.
The plan provides 100 percent guarantee coverage for additional working capital term loans up to 20 percent of outstanding credit.
Only MSME borrowers with outstanding loans of up to Rs 50 crore as of February 29, 2020 and turnover of up to Rs 250 crore for the financial year 2019-20, were eligible.
In addition, the finance minister pointed out that the country is expected to grow by 9.2% in the current financial year, thanks to a strong recovery in the economy.