The government on Wednesday extended the Emergency Credit Line Guarantee Scheme (ECLGS) till June 30 and expanded its scope to cover enterprises in hospitality, travel and tourism, leisure and sporting sectors.
ECLGS 3.0, which will cover the newly added service sectors, will involve extension of credit of up to 40 per cent of total credit outstanding across all lending institutions as on February 29, 2020. The tenor of loans granted under the scheme will be for 6 years, including a moratorium period of 2 years.
"In recognition of the continuing adverse impact of COVID-19 pandemic on certain service sectors, the government has now extended the scope of Emergency Credit Line Guarantee Scheme (ECLGS) through introduction of ECLGS 3.0 to cover business enterprises in hospitality, travel & tourism, leisure & sporting sectors which had, as on 29.02.2020, total credit outstanding not exceeding Rs 500 crore and overdues, if any, were for 60 days or less, on that date i.e. 29th Feb 2020," the Finance Ministry said in a release.
The modifications introduced in the scheme, while providing an incentive to lending institutions to enable availability of additional funding facility to the eligible beneficiaries will go a long way in contributing to economic revival, protecting jobs, and creating conducive environment for employment generation, it said.
"Further, the validity of ECLGS i.e. ECLGS 1.0, ECLGS 2.0 & ECLGS 3.0 have been extended upto 30.06.2021 or till guarantees for an amount of Rs 3 lakh crore are issued. Last date of disbursement under the scheme has been extended to 30.09.2021," the release said.
ECGLS was introduced by the government to mitigate the economic distress faced by micro, small and medium enterprises (MSMEs) because of the COVID-19 pandemic by providing them additional funding of up to Rs 3 lakh crore in the form of a fully guaranteed emergency credit line.
The scheme was expanded to cover 26 distressed sectors through ECLGS 2.0 and was extended till March 31, 2021.
The revised operational guidelines for ECLGS 3.0 will be issued by the National Credit Guarantee Trustee Company Ltd, the government said.