New Delhi: On account of the disruptions caused by the COVID 19 pandemic on hospitality and related sectors, the Government specifically earmarked Rs. 50,000 crores for enterprises in these sectors till the validity of the scheme which is March 31, 2023. The package was earmarked by the Union Cabinet today as it approved the enhancement in the limit of the Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 50,000 crore from Rs. 4.5 lakh crore to Rs. 5 lakh crore.
According to a Cabinet note, the enhancement is expected to provide ‘much-needed’ relief to enterprises in these sectors by incentivizing lending institutions to provide additional credit of up to Rs. 50,000 crores at a low cost, thereby enabling these business enterprises to meet their operational liabilities and continue their businesses.
ECLGS is an already operational scheme and loans of about Rs. 3.67 lakh crore have been sanctioned under ECLGS till August 5, 2022.
It may be mentioned that the ongoing pandemic has adversely impacted contact-intensive sectors, especially the hospitality and related sectors more severely. While other sectors were back faster on the path of recovery, demand continued to be subdued for these sectors for a longer period, suggesting the need for suitable interventions for their sustenance and recovery. Further, given their high employment intensity and their direct and indirect linkages with other sectors, their revival is also necessary for supporting overall economic recovery.
Recognising this, in Union Budget 2022-23, it was announced to extend the validity of ECLGS up to March 2023 and increase the limit of guaranteed cover of ECLGS by Rs. 50,000 crores to the total cover of Rs. 5 Lakh crore, with the additional amount being earmarked exclusively for the enterprises in hospitality and related sectors.
With high immunization levels, progressive roll-back of restrictions and overall economic recovery, conditions are in place for sustained growth in demand for these sectors as well. This additional guarantee cover is expected to support the recovery of these sectors as well. This additional guarantee cover is expected to support the recovery of these sectors.
– global bihari bureau