Emergency Line of Credit Guarantee Scheme: Center provides Rs 2222 Cr to J&K MSMEs to offset COVID-related losses
Srinagar: After years of struggle, Mukhtar Ahmad, 34, launched the Plaster of Paris (PoP) manufacturing unit in 2018.
He borrowed huge loans from banks to procure the raw material. He launched a promotional campaign to market his product in the valley.
In 2019, his business suffered huge losses. He was struggling to pay the monthly installments of his loan. Enter the Emergency Line of Credit Guarantee Scheme (ECLGS), Mukhtar’s business has taken on a new lease of life.
“I was very worried about the future. Loans swelled. Then came the Emergency Credit Line Guarantee Scheme (ECLGS). It was a lifeline for small and medium businesses across the country,” he said.
The Union Finance Ministry introduced the Emergency Credit Line Guarantee Scheme (ECLGS) in May 2020. It was intended to provide a booster shot to the pandemic-hit economy.
Under this program, the Government of the Center has announced an emergency line of credit to the commercial enterprise/MSME up to 20% of the total outstanding amount.
Data viewed by The Kashmir Monitor reveals that no less than 67,567 MSMEs in Jammu and Kashmir have received financial assistance of Rs 2222.72 crore for business revival.
As in other parts of the country, the confinement imposed during the Covid has impacted the industrialists of Jammu and Kashmir. The MSME sector was the hardest hit with a drop in sales and an increase in overheads.
Under this scheme, the Center has earmarked Rs.3 lakh crore. The Center has offered to pay unsecured loans to MSMEs and other businesses to offset losses incurred due to COVID-19-induced lockdowns.
In her budget speech, Union Finance Minister Nirmala Sitharaman proposed to extend the Emergency Credit Line Guarantee Scheme (ECLGS) until the end of March 2023, with guarantee coverage scope of Rs 5 lakh crore.
According to the document, a total of 11,261 MSMEs, including 8,314 micro, 2,794 small and 194 medium enterprises, have been registered in Jammu and Kashmir since 2015 through the Udyog Aadhar portal.
Additionally, 36,507 MSMEs including classified and unclassified emerged between July 2020 and July 2021 in Jammu and Kashmir.
According to the document, an additional 142.46 lakhs were provided to 26 beneficiaries in Jammu and Kashmir to revive the units under the Credit Guarantee Scheme for Subordinated Debt (CGSSD).
An official with the Ministry of Industry and Commerce said the administration had prioritized getting business back on track.
“Last year, the administration announced that it would grant 30% margin on total loans on favorable terms to revive ailing units. Likewise, MSMEs, who have suffered during the lockdown, have been incentivized under the ECLGS,” he said.