Finance Minister Nirmala Sitharaman has given big relief to small and medium industries i.e. MSME in the budget presented on February 1. The Finance Minister has announced to extend the deadline for the Emergency Credit Line Guarantee Scheme (ECLGS).
ECLGS Time Limit: Finance Minister Nirmala Sitharaman has given big relief to small and medium industries i.e. MSME in the budget presented on February 1. The Finance Minister has announced to extend the deadline for the Emergency Credit Line Guarantee Scheme (ECLGS). The period of ECLGS scheme has been extended till March 2023, which was earlier done till March 31, 2022. It has already been extended. The guarantee cover available under this scheme has also been increased by Rs 50,000 to Rs 5 lakh. This step of the government is being considered as a big relief especially for MSMEs.
MSME sector will get support
Religare Enterprises Ltd. Executive chairperson of Rashmi Saluja says that this budget is growth oriented. One of the biggest problems of the MSME sector was the availability of finance and the finance minister has resolved the issue correctly. The one-year extension of the Emergency Credit Line Guarantee Scheme (ECLGS) along with an increase of Rs 50,000 crore to the corpus to Rs 5 lakh crore will support the MSME sector, which has been hit the hardest by the COVID 19 pandemic.
What is ECLGS Scheme
The purpose of Emergency Credit Line Guarantee Scheme (ECLGS) is to provide cheap and collateral free loans to MSMEs and small businessmen. So that their business is not closed due to financial problems and small businessmen do not face the problem of funds for production. It was believed that in view of the demand of different industry bodies and small traders, a decision could be taken to increase the time limit of ECLGS.
The ECLGS scheme was started to provide interest-free loans to mitigate the crisis caused by the corona virus epidemic and lockdown. Earlier, a self-reliant India package of Rs 20 lakh crore was announced to support the economy. Under this package, an emergency credit line guarantee scheme of Rs 3 lakh crore was started for micro, small and medium enterprises. Under this, there is repayment of interest only for the first 24 months along with repayment of principal and interest in the subsequent 36 months.
what will be the benefit
NBFC companies focusing on MSME will also benefit from this announcement of the Finance Minister. In September last year, the government had extended the Emergency Credit Line Guarantee Scheme (ECLGS) till March this year or till the release of guarantee amounting to Rs 4.5 lakh crore in the scheme. It was said that this scheme will continue till one of the two conditions is fulfilled.
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