New Delhi: Prime Minister Narendra Modi said on Monday that a host of measures announced by Finance Minister Nirmala Sitharaman will help stimulate economic activities, boost production and exports, and generate employment.
In a series of tweets, Modi said the decisions will enhance public health facilities, especially in under-served areas, boost private investment in medical infrastructure and augment critical human resources.
Special focus is on strengthening healthcare facilities for children, he noted, adding that importance has also been given to helping farmers with multiple initiatives that will reduce their costs, increase incomes and support greater resilience and sustainability of agricultural activities.
The prime minister said more support has been announced for small entrepreneurs and self-employed persons to enable them to not only sustain their business activities but also expand them further.
Several initiatives, including financial assistance, are being taken to help those linked with tourism, he added.
"The measures will help to stimulate economic activities, boost production & exports and generate employment.
"Result linked Power Distribution Scheme and streamlined processes for PPP projects and Asset Monetisation demonstrates our Government's continuing commitment to reforms," Modi said.
To provide relief to MSMEs hit by the second COVID-19 wave, Finance Minister Nirmala Sitharaman on Monday raised the limit under the Emergency Credit Line Guarantee Scheme (ECLGS) by 50 per cent to Rs 4.5 lakh crore to help small businesses get credit at concessional rate.
The existing limit for ECLGS scheme, announced as part of Rs 20-lakh crore Atmanirbhar Bharat Abhiyan package in May 2020, was Rs 3 lakh crore.
Sharing details of the scheme, the finance minister said that contact intensive sectors are already covered and shall be continued. Around Rs 4,000 crore has been given to these sectors through this window so far and limit of admissible guarantee and loan amount proposed to be increased above existing level of 20 per cent of outstanding on each loan.
So far, banks and financial institutions have sanctioned Rs 2.73 lakh crore and disbursed Rs 2.10 lakh crore under the scheme, Department of Financial Services Secretary Debasish Panda said.
To further support the Micro, Small & Medium Enterprises (MSME) sector, the finance minister said overall cap of admissible guarantee has been raised from Rs 3 lakh crore to Rs 4.5 lakh crore.
Guarantee will be provided to Scheduled Commercial Banks for loans to new or existing NBFC-MFIs or Micro Finance Institutions (MFIs) for on lending up to Rs 1.25 lakh to approximately 25 lakh small borrowers, she added.
The scheme will have focus on new lending, not repayment of old loans and loans to borrowers would be in line with extant RBI guidelines such as number of lenders, borrower to be member of Joint Lending Group, ceiling on household income and debt, Sitharaman said.
All borrowers (including defaulters up to 89 days) will be eligible and guarantee cover for funding will be provided by MLIs to MFIs/NBFC-MFIs till March 31, 2022 or till guarantees for an amount of Rs 7,500 crore are issued, whichever is earlier.
Guarantee up to 75 per cent of default amount for up to three years through National Credit Guarantee Trustee Company (NCGTC) will be given and no guarantee fee to be charged by NCGTC, she added.
Last month, the finance ministry expanded the scope of the Rs 3 lakh crore ECLGS by including concessional loans to hospitals for setting up on-site oxygen generation plants. Besides, the validity of the scheme was extended by three months to September 30 and or till guarantees for an amount of Rs 3 lakh crore were issued.
The last date of disbursement under the scheme has been extended to December 31.
Under the ECLGS 4.0, 100 per cent guarantee cover was given to loans up to Rs 2 crore to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants. The interest rate on these loans has been capped at 7.5 per cent, which means the banks can offer loans less than this ceiling.
Consortium of Indian Associations Convenor K E Raghunathan while welcoming the decision to raise the limit for ECLGS scheme demanded waiver of capital gain tax for small and micro enterprises, offering OTS for those who want to close their loans and restart fresh, and raising GST exemption limits.