Indian minister of finance and corporate affairs Nirmala Sitharaman today announced guaranteed credit for supporting stressed sectors, as part of Atmanirbhar Bharat Package 3.0. Tenor of additional credit under ECLGS 2.0 will be 5 years, including one-year moratorium on principal repayment. The scheme will be available till March 31, 2021.
The Emergency Credit Line Guarantee Scheme (ECLGS) 2.0 is to be utilised for 100 per cent guaranteed collateral free additional credit at capped interest rates to: entities in 26 stressed sectors identified by Kamath Committee plus health care sector with credit outstanding of above ₹50 crore and up to ₹500 crore as on February 29, 2020; entities with outstanding up to ₹50 crore previously covered under existing scheme; no upper ceiling on annual turnover; entities to be up to 30 days past due (SMA 0) as on February 29, 2020; and additional credit up to 20 per cent of outstanding as on February 29, 2020.
"ECLGS 2.0 will provide much needed relief to stressed sectors by helping entities sustain employment and meet liabilities. Will also benefit MSME sector which provides goods and services to eligible entities,” Sitharaman said.
To boost employment, Sitharaman also announced Atmanirbhar Bharat Rozgar Yojana, wherein the Central government will provide subsidy for two years in respect of new eligible employees engaged on or after October 1, 2020 at following scale: 24 per cent of wages for establishments employing up to 1,000 employees; and 12 per cent of EPF wages for establishments employing more than 1,000 employees.
Welcoming AtmaNirbhart Bharat 3.0 measures, Indian Texpreneurs Federation (ITF) convenor Prabhu Dhamodharan said, "Extending ECLGS scheme with 100 per cent guaranteed collateral-free credit at capped interest rates to entities in the 26 stressed sectors including textiles with no upper ceiling on annual turnover will help medium-sized companies to utilise the opportunity in improving their business performance."
ECLGS scheme helped MSMEs in resolving the liquidity issues and now with this announcement, other companies with large employment also will get benefit, according to Dhamodharan.
"To incentivise new employment, the new scheme of 24 per cent EPF contribution from government to companies engaging up to 1,000 workers will help maximum number of companies in textile and apparel sector," Dhamodaran added.
Under the ₹3 lakh crore existing ECLGS 1.0 announced as part of the Aatmanirbhar Bharat Abhiyaan, ₹2.05 lakh crore has been sanctioned to 61 lakh borrowers as on November 12, 2020, Sitharaman said. Of this, ₹1.52 lakh crore has been disbursed till date.