Rs 1.1 lakh crore guarantee scheme announced for COVID-19 affected sectors

Finance Minister Nirmala Sitharaman said during a press conference on Monday that the government will roll out a Rs 1.1 lakh crore guarantee scheme for COVID-19 affected sectors. Out of that, Rs 50,000 crore will be allotted to the health sector and other sectors will receive Rs 60,000 crore.

The minister said that the Rs 50,000 crore allotted to the health sector is given with an aim to scale up medical infrastructure in underserved areas. This will involve guarantee cover for expansion and new projects related to health and medical infrastructure in cities other than the eight metropolitan cities. The minister said that under the guarantee cover, 50 per cent will be for expansion and 75 per cent will be for new projects.

However, in aspirational districts, the guarantee cover will be 75 per cent for both new projects and expansion.

The maximum amount of loan that will be granted under the scheme will be Rs 100 crore with a guarantee duration of 3 years. Interest rate will be capped at 7.95 per cent.

The Rs 60,000 crore reserved for other sectors will have an interest rate of 8.25 per cent. This will be further clarified based on evolving needs.

Without the guarantee scheme interest rate will be at 10-11 per cent.

Also read: FM Sitharaman's presser Live: Centre announces Rs 1.1 lakh crore credit guarantee for Covid-affected sectors; Rs 1.5 lakh cr for ECLGS