ECLGS 1.0 relaxation to benefit MSMEs

By OEM Update Editorial June 3, 2021 5:47 pm IST

Uday Shankar welcomes the steps taken by the banking fraternity to support industry, particularly the MSME sector, during this hour of crisis.

Commenting on the set of announcements made earlier today by Dinesh Khara, Chairman, SBI on the ECLGS Scheme and Restructuring Plan, Uday Shankar, President, FICCI said, “We welcome the steps taken by the banking fraternity to support industry, particularly the MSME sector, during this hour of crisis. The second COVID-19 wave has been devastating for many businesses and it was only appropriate for the banking sector to come forward and announce these measures. FICCI would like to thank the Finance Minister for this considered view and for leading from the front in this economic battle.”

“Relaxations announced under ECLGS 1.0 both in terms of extension of period of repayment as well as offer of an additional 10 percent loan will serve the MSMEs well. Removal of the ₹ 500 crore cap for eligibility under ECLGS 3.0 and inclusion of the civil aviation sector are also welcome. Both these suggestions were made by FICCI recently to the Finance Ministry and we are happy to see their implementation. The new scheme ECLGS 4.0 provides financial support to the critical healthcare sector, and we hope that the banks will go all out in disbursing the loans in a quick and timely manner. We need to a ramp up the health infrastructure in the country over the next few months to prepare ourselves well for any future waves,” added Shankar.

“Finally, while the ECLGS Scheme has been extended till September 2021 with disbursements being allowed till December 2021, it would have further helped if a higher allocation would have also been made under this scheme. We understand that of the ₹ 3 lakh crore initially sanctioned, ₹ 2.54 lakh crore has been disbursed leaving ₹ 45,000 crore as the balance amount. FICCI had requested that the quantum under ECLGS should be doubled to ₹ 6 lakh crore. We hope the Finance Ministry will keep a close watch on the situation and appropriate enhancements will be made in time, as required,” said Shankar.