Relaxations announced under ECLGS 1 will serve the MSMEs well: Uday Shankar, President, FICCI

Commenting on the set of announcements made earlier today by Mr Dinesh Khara, Chairman, SBI on the ECLGS Scheme and Restructuring Plan, Mr Uday Shankar, President, FICCI said, “We welcome the steps taken by the banking fraternity to support industry, particularly the MSME sector, during this hour of crisis. The second COVID-19 wave has been devastating for a large number of businesses and it was only appropriate for the banking sector to come forward and announce these measures. FICCI would like to thank the Finance Minister for this considered view and for leading from the front in this economic battle.”

“Relaxations announced under ECLGS 1.0 both in terms of extension of period of repayment as well as offer of an additional 10% loan will serve the MSMEs well. Removal of the Rs 500 crore cap for eligibility under ECLGS 3.0 and inclusion of the civil aviation sector are also welcome. Both these suggestions were made by FICCI recently to the Finance Ministry and we are happy to see their implementation. The new scheme ECLGS 4.0 provides financial support to the critical healthcare sector, and we hope that the banks will go all out in disbursing the loans in a quick and timely manner. We need to a ramp up the health infrastructure in the country over the next few months to prepare ourselves well for any future waves,” added Mr Shankar.

“Finally, while the ECLGS Scheme has been extended till September 2021 with disbursements being allowed till December 2021, it would have further helped if a higher allocation would have also been made under this scheme. We understand that of the Rs 3 lakh crore initially sanctioned, Rs 2.54 lakh crore has been disbursed leaving Rs 45,000 crore as the balance amount. FICCI had requested that the quantum under ECLGS should be doubled to Rs 6 lakh crore. We hope the Finance Ministry will keep a close watch on the situation and appropriate enhancements will be made in time, as required,” said Mr Shankar.

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