Nirmala Sithraman Announces Rs 1.1 Lakh Cr Loan Guarantee Scheme For COVID-Affected Sectors

Finance Minister is likely to announce relief measures to cover the drastic affect of the second Covid wave.

Nirmala Sitharaman

New Delhi: Union Finance Minister Nirmala Sitharaman announced Covid Economic Relief Package for the sectors severely affected by the second wave of coronavirus pandemic.

Addressing a press conference on Monday, the Union Finance Minister said that the Centre is announcing about eight economic relief measures, of which four are absolutely new and one is specific to health infrastructure. 

Elaborating the economic relief measures, Sitharaman announced 1.1 lakh crore loan guarantee scheme for Covid affected sectors and Rs 50,000 crores for health sector, aimed at upscaling medical infrastructure targeting underserved areas. Other sectors will get Rs 60,000 lakh crore.

Sitharaman further announced additional 1.5 lakg crore for emergency credit line guarante scheme as part of Aatma Nirbhar Bharat Package, another Rs 1.5 lakh crore credit is being given. The scope of scheme itself has been enlarged, overall cap increased from Rs 3 lakh crore to Rs 4.5 lakh crore.  

The Finance Minister announced an additional Rs 1.5 lakh crore for ECLGS. So far, under ECLGS, Rs 2.69 lakh crore credit has been disbursed, she said. Finance Minister went on to say that the limit of ECLGS scheme which aims to provide financial support of collateral-free, government-guaranteed loans to micro, small and medium enterprises (MSMEs) across India to mitigate the distress, has been raised to Rs 4.5 lakh crore. Earlier this amount was around 3 lakh crore.

Under Credit Guarantee Scheme, which is a new scheme, 25 lakh people to be benefitted. Loan to be given to the smallest borrowers by Microfinance Institutions. A maximum Rs 1.25 lakhs amount to be lent. Focus is on new lending and not on repayment of old loans, the Finance Minister said.

Among other measures, the Finance minister announced financial support to more than 11,000 registered tourist guides/travel and tourism stakeholders through the loan guarantee scheme for COVID-affected sectors. 

Finance Minister announced extension of Aatma Nirbhar Bharat Rozgar Yojana till 31st March 2022. Sitharaman said that since October 2020, about 21.42 lakh beneficiaries of 79,577 establishments have been benefitted from the scheme. 

Free food grains will be provided to the poor from May to November 2021 as provided last year, under Pradhan Mantri Garib Kalyan Anna Yojana. The estimated financial implication are Rs. 94,000 Crore making the total cost of PMGKY nearly Rs. 2.28 Lakh Crore. Farmers will get additional protein-based fertilizer subsidy of nearly Rs 15,000 Crore. 

With several states announcing local lockdowns to prevent the virus spread, the recovery process from the devastating impact of the first wave of COVID-19 has become difficult for many — especially for the tourism, hospitality sector and MSMEs.

Meanwhile, a high-level panel headed by the cabinet secretary recently held a meeting to thrash out various regulatory and administrative issues related to the privatisation of two separate banks so that the proposal could be placed with the group of ministers on disinvestment or Alternative Mechanism (AM) for approval, according to a report by PTI.