Enhancement in ECLGS limit

On July 17, 2022 Union Cabinet gave its nod to increase the “Emergency Credit Guarantee Scheme (ECLGS)” limit by Rs 50,000 crore. With this increase, the limit will increase to Rs. 5 trillion. Additional amount is being reserved for entities in hospitality and other related sectors.

  • Additional amount was approved after considering that, other sectors recovered faster. But there is a constant demand of subdued for hospitality and related sectors which requires suitable measures for recovery and sustenance.
  • With high immunization levels, there exits progressive roll-back of restrictions and overall economic recovery, to attain a sustained growth in demand for these sectors also.
  • Additional guarantee cover will support the recovery of these sectors.
  • This extension will be beneficial for sectors that have witnessed traction in past six months.
  • Lower cost will help in providing fund working capital for tourist operators, restaurants and small hotels.

About ECLGS scheme

The Emergency Credit Guarantee Scheme was launched in 2020 as a part of Atmanirbhar Bharat Package. Scheme was launched to help businesses in meeting their operational liabilities and resume after covid-19 pandemic. under the scheme, 100% guarantee is provided to banks against any losses incurred to them due to non-repayment of loans by borrowers. As of August 5, 2022 loans of around Rs 3.67 trillion have been sanctioned under it. Finance Minister Nirmala Sitharaman had extended the Emergency Credit Guarantee Scheme in her Budget speech 2022. Scheme has been extended till March 2023.

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