Budget 2022: Finance Minister Nirmala Sitharaman on Tuesday announced the extension of Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023 with its guarantee cover expanded by Rs 50,000 crore to Rs 5 lakh crore.
Announcing the Union Budget 2023 in Parliament earlier in the day, FM Sitharaman said that additional funds will be embarked for the hospitality sector as it is yet to recover to pre-pandemic levels.
"An additional amount has been earmarked exclusively for hospitality, related sectors and the government will take steps to make the MSME (Micro, Small and Medium Enterprises) sector more resilient, the Finance Minister said.
"This will facilitate additional credit of Rs 2 lakh crore for micro and small enterprises and expand employment opportunities," she added.
The Finance Minister also noted that a Raising and Accelerating MSME Performance (RAMP) programme will be rolled out by the government with a Rs 6,000 cr outlay spread over a span of 5 years to help micro, small and medium enterprises (MSME) sector become more resilient, competitive and efficient.
It is important to both create liquidity for MSMEs as well as ensure that it reaches those most in need, and is good to see both aspects covered in this budget, he added.
"The extension of the ECLGS to March 2023 will be especially welcomed by the MSME sector, which constitutes 95% of ECLGS borrowers. CGTMSE Revamp and Announcement of MSME RAMP are also welcome moves," Ankur Bhageria, CEO and Founder, CashFlo told ABP Live.
The announcement comes months after the government, in September 2021, extension of ECLGS till 31 March, 2022, or till guarantees for an amount of Rs 4.5 lakh crore are issued under the scheme, whichever is earlier.
Announced under government's flagship "Atmanirbhar Bharat Abhiyan", the ECLGS offers additional working capital finance in the form of a term loan to MSMEs and professionals. It is said to be a key component of Rs 20 trillion economic stimulus package announced by the government.