The authorities is open to extend the funding restrict of Rs 3 lakh crore below the emergency credit score line assure scheme (ECLGS), the scope of which was widened Sunday to incorporate civil aviation sector and supply additional reduction to current debtors. Leading business gamers have argued that the federal government ought to improve the restrict to Rs 4-6 lakh crore to make sure that advantages attain a big set of corporations.
“Currently, there is a headroom of about Rs 45,000 crore under the scheme, which, we believe, should be sufficient to cater to new category of beneficiaries under the scheme. But, the government is open to increasing it if required, may be by another Rs 1 lakh crore. This will depend upon the how the scheme is exhausted, what kind of companies are availing it,” a senior Finance Ministry official mentioned.
Under ECLGS, which is for serving to corporations tide over liquidity crunch ensuing from Covid curbs, banks present extra loans to current debtors with out asking for additional collateral. To encourage banks, these loans are absolutely assured by the federal government in opposition to credit score losses. “We did a lot of number crunching and data tells us that the existing window is sufficient to accommodate possible stressed entities that could be looking for funding. But if more funds are required and more beneficiaries are added, the government can then enhance the funding limit,” the official mentioned.
The authorities on Sunday expanded the scope of the ECLGS to supply extra reduction to small companies. It introduced the aviation sector below its ambit, and offered a concessional credit score facility of as much as Rs 2 crore in loans for well being services to arrange oxygen technology crops. Those who’ve availed loans below the scheme can get extra help of as much as 10 per cent of excellent dues as of February 29, 2020.
“While the ECLGS has been extended till September 2021 with disbursements being allowed till December 2021, it would have further helped if a higher allocation would have also been made under this scheme. We understand that of the Rs 3 lakh crore initially sanctioned, Rs 2.54 lakh crore has been disbursed leaving Rs 45,000 crore as the balance amount,” Ficci president Uday Shankar has mentioned.
Ficci had requested that the quantum below ECLGS must be doubled to Rs 6 lakh crore. We hope the Finance Ministry will hold a detailed watch on the state of affairs and acceptable enhancements can be made in time as required, he had mentioned. CII additionally identified the necessity for an extra ECLGS, together with growing the scale from Rs 3 lakh crore to Rs 4-5 lakh crore.
The authorities eliminated the present ceiling of Rs 500 crore of excellent loans for eligibility below ECLGS, topic to most extra help to every borrower being restricted to 40 per cent or Rs 200 crore, whichever is decrease.
