New Delhi: The Union Cabinet on Wednesday approved the Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS) enabling funding to the tune of Rs 50,000 crore to provide financial guarantee cover for brownfield expansion and greenfield projects related to health and medical infrastructure. The scheme has been approved on account of the disruptions caused by the second wave of COVID-19, especially in the healthcare sector. The Cabinet has also approved the introduction of a scheme for other sectors and lenders including those allied to better healthcare. An official release said that detailed modalities would be finalized in due course depending upon the evolving situation.
The Cabinet has also approved additional funding up to Rs 1,50,000 crore under Emergency Credit Line Guarantee Scheme (ECLGS).ECLGS is a continuing scheme. It would be applicable to all eligible loans sanctioned under Guaranteed Emergency Credit Line (GECL)till September 30 or till an amount of Rs 4.50 lakh crore is sanctioned, whichever is earlier. The government has further enlarged the scope of the scheme on account of the disruptions caused by the second wave of COVID 19 pandemic to businesses across various sectors of the economy.
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The enhancement is expected to provide much-needed relief to various sectors of the economy by incentivizing lending institutions to provide additional credit of up to Rs 1.5 lakh crore at a low cost to help enterprises meet their operational liabilities and continue their businesses. Besides supporting MSMEs to continue functioning during the current unprecedented situation, the scheme is also expected to have a positive impact on the economy and support its revival.
LGSCAS would be applicable to all eligible loans sanctioned up to March 31, 2022, or till Rs 50,000 crores is sanctioned, whichever is earlier. The release said that LGSCAS has been formulated as a specific response to an exceptional situation the country has witnessed due to lack of adequate health infrastructure including that related to medical oxygen in several hospitals in the second wave of COVID-19. The approved scheme is expected to help the country in shoring up its much-needed healthcare infrastructure along with creating more employment opportunities. The main objective of LGSCAS is to partially mitigate credit risk (primarily construction risk) and facilitate bank credit at lower rates of interest.
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(ANI)
