Credit and Finance for MSMEs: Nearly 81 lakh MSMEs have taken advantage of Prime Minister Narendra Modi’s Emergency Credit Line Guarantee Scheme (ECLGS) under the Atmanirbhar Bharat package. The banks have sanctioned around Rs 2.05 lakh crore out of the Rs 3 lakh crore pledged under the scheme to help the MSME sector to revive from the coronavirus woes. The finance ministry today said that 40 lakh MSME accounts have received Rs 1.58 lakh crore till December 4. As part of the Aatmanirbhar Bharat Abhiyan 3.0 announced last month, ECLGS scheme has been extended through ECLGS 2.0 for the 26 stress sectors and health care sector with credit outstanding of above Rs 50 crore and up to Rs 500 crore as on February 2020, FinMin tweeted.
However, the additional liquidity afforded through the scheme for the 26 affected sectors would be much higher at almost 10 times of cash flow contraction due to the Covid -19 induced pandemic, a Crisil report said. While the companies in high-resilience sectors such as dairy, information technology, FMCG, chemicals, and pharmaceuticals are less impacted, with the decline in their cash flow restricted to 10%, they are also expected to benefit from the ECLGS scheme.
The loans provided under ECLGS 2.0 have a five-year tenor, with a 12-month moratorium on repayment of principal and the entire scheme is valid till the end of the current fiscal year 2020-21. In further support to the industry, power, construction, real estate, textiles, pharmaceuticals, logistics, cement, auto components, and hotels are some of the sectors identified by the Kamath Committee for one-time debt restructuring.
It is to be noted that the RBI had set up the committee headed by former ICICI Bank chairman K V Kamath for suggesting financial parameters to be factored in the resolution plans under the ‘Resolution Framework for COVID-19 related Stress’ along with sector-specific benchmark ranges for such parameters. Meanwhile, the finance ministry apprised that Rs 775 crore have been released to Small Industries Development Bank of India (SIDBI) under the Rs 1,500 crore ‘Interest Subvention for MUDRA-Shishu Loan’. Out of which, Rs 206.73 crore has already disbursed to Member Lending Institutions (MLIs) as part of the first tranche for the immediate release of interest subvention benefit.