Cabinet enhances ECLGS scheme for travel, hospitality sector by Rs 50,000 cr 

Union Cabinet has approved Emergency Credit Line Guarantee Scheme (ECLGS) worth Rs 50,000 crore for hospitality, travel and tourism sectors. The overall ECLGS allotment has been hiked from Rs 4.5 lakh crore to Rs 5 lakh crore, Union Information and Broadcasting Minister Anurag Thakur noted.  

“Cabinet approved enhancement of limit of emergency credit line guarantee scheme by Rs 50,000 crore for travel, tourism and hospitality sector,” Thakur noted. He further mentioned, “For that, excessive additional guarantee will be given. The corpus will be given by the Central government that will be Rs 7,500 crore for this year.” 

The additional amount has been earmarked exclusively for hospitality and allied sectors till March 31, 2023. As of August 5, loans worth around Rs 3.67 lakh crore have been sanctioned under ECLGS, which is a continuing scheme implemented for tiding over the COVID-19 crisis.   

ECLGS allocation towards the sector has been increased to counter severe disruptions triggered by the coronavirus pandemic. Besides this, the additional allocation is also aimed at incentivising lending institutions to provide additional credit of upto Rs 50,000 crore at low cost so that the sector can meet its operational liabilities.   

“With high immunisation levels, progressive roll-back of restrictions and overall economic recovery, conditions are in place for sustained growth in demand for these sectors as well. This additional guarantee cover is expected to support the recovery of these sectors as well,” the government’s release on Cabinet decisions approved under the leadership of Prime Minister Narendra Modi read.  

It further stated that the revival of hospitality sector and allied industries is necessary since they provide large number of jobs and, in turn, help in aiding overall economic recovery.  

Also read: Cabinet approves interest subvention of 1.5% on short term agri loan up to Rs 3 lakh