Further, the finance minister also announced that the cover will be expanded by another Rs 50,000 crore to Rs 5 lakh crore. The FM noted that the hospitality sector, a contact-intensive sector, is yet to recover to pre-pandemic levels and as such, additional funds will be earmarked for the sector.
“Allowing one-year moratorium extension for loans availed under the Emergency Credit Line Guarantee Scheme (ECLGS) would ease current liquidity issues (for the hospitality sector),” as per ICICI Direct.
FM Sitharaman said that a 5-year programme will be rolled out to accelerate the performance of MSMEs.
EIH, TajGVK, Lemon Tree Hotels are the key stocks, the brokerage wrote in a note.
The government launched the Emergency Credit Line Guarantee Scheme (ECGLS) as part of its Rs 20 lakh crore comprehensive package announced by the Finance Ministry on May 13, 2020.
Under this, credit under GECL would be up to 20% of the borrower’s total outstanding credit up to Rs 25 crore as on February 29, 2020. Also, interest rate was capped at 9.25% for banks and 14% for NBFCs. In addition to this, 100% guarantee for additional funding up to Rs 4.5 lakh crore for Covid-affected MSMEs was sanctioned.
According to the Economic Survey, up till November 19, 2021, Rs 2.28 lakh crore had been disbursed to 95.2 lakh borrowers, impacting 5.45 crore employees. Also, 66% of the guarantee amount was disbursed to MSMEs. The scheme has also been extended till March 31, 2022.
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