Govt weighs extension of emergency credit scheme

The government is examining a proposal to increase the validity of the Emergency Credit Line Guarantee Scheme (ECLGS), which is now set to expire in March.

The scheme offers government guarantees for up to 4.5 lakh crore of loans, and banks have so far sanctioned about 2.9 lakh crore under it. The government may expand the validity of the scheme by up to a year and the overall loan cap by 10%, said a finance ministry official.

The scheme was launched after the national lockdown during the first Covid wave to provide support to MSMEs and has since been expanded to cover other sectors such as aviation. As of now, about 95% of the guarantees issued are for loans sanctioned to MSMEs.