The Indian government is preparing a new credit guarantee scheme for industries to reduce the impact of the ongoing tension in West Asia. Its objective is to enable companies to get loans easily, especially those companies which are troubled by the rising costs of raw materials and transport. According to the ET report, under this scheme the government can give a guarantee of around Rs 2 to 2.5 lakh crore. It can be launched in the next two weeks. The government is already assessing the economic impact of the war.
Relief from liquidity shortage
According to a government official, the purpose of this scheme is to give confidence to the companies so that they can continue working even in an uncertain environment. The situation is not too bad right now, but the government is making preparations in advance so that the pressure on the economy remains less. Officials have contacted the companies to find out how much their production is being affected. Also, companies have been asked to immediately inform the government if there is any major problem.
The plan will be based on a scheme like ECLGS
This new scheme may be like the ECLGS scheme during the time of Covid-19. In this, many businesses including MSMEs can get loans without guarantee, so that they can overcome the shortage of cash. According to the report, loan default cases have not increased much yet, but some sectors, especially export-related industries, appear to be under pressure. This step is being taken at the right time because it may take time for the situation to become normal.
Plan was made even during Covid
According to the latest data, under the ECLGS scheme launched during Covid, the government had given a total guarantee of Rs 3.62 lakh crore, which directly benefited about 1.19 crore people and companies. On an average, each account got a guarantee cover of up to Rs 3 lakh, which provided great relief to small and medium businesses in difficult times.
At the same time, the impact of this scheme was clearly visible on the MSME sector also. According to a report, loans worth about ₹ 1.8 lakh crore were saved from NPA, which reduced the pressure on the banking system. With this, more than 13.5 lakh MSME units were saved from closure, which is considered a big success of this scheme.
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