• In recognition of the continuing adverse impact of COVID-19 pandemic on certain service sectors, the Government has now extended the scope of Emergency Credit Line Guarantee Scheme (ECLGS).

    • The scheme is extended through introduction of ECLGS 3.0 to cover business enterprises in Hospitality, Travel & Tourism, Leisure & Sporting sectors which had, as on 29.02.2020, total credit outstanding not exceeding Rs. 500 crore and overdues, if any, were for 60 days or less. 

    • ECLGS 3.0 would involve extension of credit of upto 40% of total credit outstanding across all lending institutions as on 29.02.2020.

    • The tenor of loans granted under ECLGS 3.0 shall be 6 years including moratorium period of 2 years.

    • Further, the validity of ECLGS i.e. ECLGS 1.0, ECLGS 2.0 & ECLGS 3.0 have been extended upto 30.06.2021 or till guarantees for an amount of Rs. 3 lakh crore are issued.

    • Last date of disbursement under the scheme has been extended to 30.09.2021.

    • The tenor of loans granted under the scheme will be for 6 years, including a moratorium period of 2 years.

    • The modifications introduced in the scheme, while providing an incentive to MLIs to enable availability of additional funding facility to the eligible beneficiaries will go a long way in contributing to economic revival, protecting jobs, and creating conducive environment for employment generation.

About ECGLS

    • ECGLS was introduced by the government to mitigate the economic distress faced by micro, small and medium enterprises (MSMEs) because of the COVID-19 pandemic.

    • The scheme provides them additional funding of up to Rs 3 lakh crore in the form of a fully guaranteed emergency credit line.

    • The scheme was expanded to cover 26 distressed sectors through ECLGS 2.0 and was extended till March 31, 2021.

    • The revised operational guidelines for ECLGS 3.0 will be issued by the National Credit Guarantee Trustee Company Ltd, the government said.

(The author is a trainer for Civil Services aspirants. The views expressed here are personal.)