Government has decided to extend the duration of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 31, 2022, adhering to demands from several industry bodies and related stakeholders, to ensure support to businesses which have been impacted by the Coronavirus pandemic.
The scheme's timeline has been extended till the end of the current financial year or till guarantees for an amount of Rs 4.5 lakh crore are issued under it, whichever happens earlier, a statement issued by the Finance Ministry said.
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In addition to this, the last date of disbursement of credit under it has also been extended till June 30, 2022.
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The ECGLS had been introduced by the government in May 2020, just a month after the nation-wide lockdown had been imposed in March 2020, with the aim of providing fiscal relief to business which had been impact by the lockdown.
Some changes have been effected in the scheme to ensure support to businesses which had been hit by the second wave of the pandemic. Under these changes, existing borrowers will be eligible for additional credit support of up to 10 per cent of total outstanding credit as on February 29, 2020 or March 31, 2021, whichever is higher.
Those businesses which had not availed of financial assistance under ECGLS 1.0 or 2.0, will also be able to avail credit of up to 30 per cent of their outstanding credit as on March 31, 2021.
In addition to this, businesses which are in sectors covered under ECLGS 3.0 and who have not availed the scheme, will be able to seek financial help of up to 40 per cent of their outstanding credit as on March 31, 2021 to the maximum of Rs 200 crore per borrower.
The changes in the scheme have been made to ensure that those businesses hit by the second wave of the pandemic get enhanced collateral free liquidity, official sources said.
Most of the credit extended under the scheme has been to micro, small and medium enterprises and till date loans worth Rs 2.86 lakh crore have been disbursed.
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