Cabinet to inject Rs50,000 crore in Hospitality Industry via emergency credit line

18 Aug 2022 , 12:14 PM

The Union Cabinet has increased the corpus of the Emergency Credit Line Guarantee Scheme (ECLGS) from Rs4.5 lakh crore to Rs5 lakh crore, specifically for the hospitality sector.

In her Budget speech this year, Union Finance Minister Nirmala Sitharaman announced that the scheme for Micro, Small, and Medium Enterprises (MSMEs) will be extended by one year up to March 31, 2023. Further, she emphasized that the guaranteed cover would be increased by Rs50,000 crore to a total of Rs5 lakh crore with a primary focus on the ‘Hospitality Sector’.

Union Minister Anurag Thakur disclosed in his statement that the Cabinet granted its approval to raise the limit of the Emergency Credit Line Guarantee Scheme to boost the travel, tourism, and hospitality sector.

The Union Finance Ministry data outlines that loans of about Rs3.67 lakh crore have been sanctioned under ECLGS till August 5, 2022.

The Finance Ministry expressed that the increase in Emergency Credit Line has been initiated to tackle the severe disruptions caused by the Covid-19 pandemic in the hospitality industry.

The additional amount will be available for the hospitality and related sectors till the validity of the scheme, i.e., March 31, 2023.

This enhancement will provide a much-needed relief to the hospitality, and travel & tourism sectors by incentivizing lending institutions to provide additional credit of up to Rs50,000 crore at a low cost. Therefore, helping these business enterprises to meet their operational liabilities and continue their businesses.