Emergency Credit Line Guarantee Scheme (ECLGS)

Union Finance Minister has recently said that the COVID Emergency Credit Facility covers all companies and not just Micro, Small and medium enterprises (MSMEs).

Emergency Credit Line Guarantee Scheme (ECLGS)

• It is the biggest fiscal component of the Rs 20-lakh crore Self-Reliant India Mission package announced by Finance Minister last month.
• Under the scheme, 100 per cent guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible companies and borrowers, in the form of a guaranteed emergency credit line (GECL) facility.
• For this purpose, a corpus of Rs 41,600 crore was provided by the government, spread over the current and next three financial years.

Objective

• The main objective of the scheme is to provide an incentive to member lending institutions to increase access and enable the availability of additional funding facility to borrowers, in view of the economic distress caused by the COVID-19 crisis.

UPSC