Emergency credit scheme till March 2022

The government extended the validity of the Emergency Credit Line Guarantee Scheme (ECLGS) until March, the sixth such extension, while further expanding its scope.

The government had initially budgeted for Rs 3 lakh crore of funding through the scheme, which was announced to help small businesses tide over a liquidity squeeze after the national lockdown in 2020. But the limit was enhanced to Rs 4.5 lakh crore earlier this year.

Some of the associations representing MSMEs are, however, demanding that the scheme should be open-ended. The finance ministry said that so far Rs 2.86 lakh crore has been sanctioned using the backstop facility with 95% of the guarantees used for lending to micro, small and medium enterprises (MSMEs).