The authorities on Thursday launched a brand new model of its Rs 3-lakh-crore assured mortgage programme, initially meant for MSMEs, to learn even bigger corporations in 27 harassed sectors ravaged by the Covid-19 pandemic, because it introduced a raft of measures beneath the Aatmanirbhar package deal 3.Zero to deliver the economic system again on its toes quick.
The transfer follows Rs 1.46 lakh crore production-linked incentive (PLI) schemes launched for 10 sectors on Wednesday, searching for to lure primarily giant corporations to ramp up manufacturing base and increase exports.
However, the Emergency Credit Line Guarantee Scheme (ECLGS) 2. Zero has been rolled out with out elevating the general mortgage restrict, as one-third of the Rs 3-lakh-crore cap is but to be exhausted. That means no extra budgetary expenditure will likely be required for the revamped scheme. Nevertheless, it’s open to revising the restrict later, primarily based on the responses.
Both the ECLGS 1.Zero and ECLGS 2.Zero will run concurrently and firms can faucet the schemes till March 2021, as the federal government seeks to make sure higher move of credit score to raise financial actions within the aftermath of the easing of lockdown. The ECLGS was earlier prolonged solely as much as November 30 this 12 months.
Finance minister Nirmala Sitharaman mentioned, beneath the ECLGS 2.0, corporations in 26 harassed sectors recognized by the Kamath panel in addition to healthcare, with credit score excellent of above Rs 50 crore and Rs 500 crore as of February 29, will likely be eligible to stand up to 20% extra collateral-free mortgage with official assure.
The sectors embody energy, building, iron and metal, roads, actual property, wholesale buying and selling, textiles, shopper durables, aviation, logistics, motels, eating places and tourism, and mining.
The authorities has already earmarked a corpus of Rs 41,600 crore over the present and the subsequent three monetary years to implement the ECLGS.
Unlike within the ECLGS 1.0, there isn’t any turnover restrict set for the businesses to faucet the scheme. Their accounts will need to have been SMA-0 (the place the delay in reimbursement ranges between one and 30 days) as of February 29, 2020.
Interest charges beneath each the variations of the scheme are capped at 9.25% for banks and different monetary establishments, and 14% for NBFCs. However, as an alternative of 4 years, the tenor of loans to be supplied beneath the ECLGS 2.Zero is 5 years, together with a moratorium of 1 12 months on precept reimbursement.
“ECLGS 2.0 to provide much-needed relief to stressed sectors by helping entities sustain employment and meet liabilities. It will also benefit MSME sector which provides goods and services to eligible entities,” the finance minister mentioned.
Loan progress has been faltering in latest months. According to the most recent RBI information, non-food financial institution credit score progress decelerated to five.8% on 12 months in September from 8.1% a 12 months earlier than.
Loans of Rs 2.05 lakh crore has been sanctioned to date beneath the ECLGS since its rollout on June 1 to 61 lakh debtors. Of this, an quantity of Rs 1.52 lakh crore has been disbursed.
Under the ECLGS 1. 0, introduced as a part of the federal government’s Rs 21 lakh-crore aid package deal in May, the Centre has pledged full assure for as much as 20% additional, collateral-free working capital loans, topic to the Rs 3-lakh-crore restrict. While this scheme was initially meant for less than MSMEs, the federal government, in August, determined to calm down the eligibility standards to cowl professionals and allow a wider pool of companies to learn from it.
Still, as a part of its expanded protection, corporations with an annual turnover restrict of solely as much as Rs 250 crore are eligible to faucet the ECLGS 1. 0. Even people similar to medical doctors, chartered accountants, legal professionals, and many others, who want to take loans for skilled functions, are coated. Similarly, eligible companies with solely as much as Rs 50 crore excellent as of February 29 can avail of the extra assured loans.