The Union Cabinet on Wednesday approved the enhancement in the limit of the Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 50,000 crore to Rs 5 lakh crore, with the additional amount being earmarked exclusively for enterprises in hospitality and related sectors.
Addressing a press conference after a meeting of the union cabinet, Information and Broadcasting Minister Anurag Thakur said the increase has been done on account of the severe disruptions caused by the COVID-19 pandemic on hospitality and related enterprises.
ECLGS is a continuing scheme and the additional amount of Rs. 50,000 crore would be made applicable to enterprises in hospitality and related sectors till validity of the scheme in March 31 next year.
Thakur said ECLGS is an already operational scheme and on account of the disruptions caused by the COVID-19 pandemic on hospitality and related sectors, the government has specifically earmarked an amount of Rs. 50,000 crore for enterprises in these sectors.
The enhancement is expected to provide much-needed relief to enterprises in these sectors by incentivizing lending institutions to provide additional credit of up to Rs 50,000 crore at low cost, enabling these business enterprises to meet their operational liabilities and continue their businesses.
Loans of about Rs. 3.67 Lakh crore have been sanctioned under ECLGS till August 5.
An official release said that the pandemic has adversely impacted contact-intensive sectors, especially the hospitality and related sectors more severely.
While other sectors were back faster on the path of recovery, demand continued to be subdued for these sectors for a longer period, suggesting the need for suitable interventions for their sustenance and recovery.
The release said that given their high employment intensity and their direct and indirect linkages with other sectors, their revival is also necessary for supporting overall economic recovery.
It was announced in Union Budget 2022-23 to extend the validity of ECLGS up to March, 2023 and increase in the limit of guaranteed cover of ECLGS by Rs 50,000 crore to total cover of Rs 5 lakh crore, with the additional amount being earmarked exclusively for the enterprises in hospitality and related sectors.
With high immunization levels, progressive roll-back of restrictions and overall economic recovery, conditions are in place for sustained growth in demand for these sectors as well, the release said, adding that this additional guarantee cover is expected to support the recovery of the sectors.
( With inputs from ANI )
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