Finance Minister Nirmala Sitharaman on Monday announced Rs 1.1 lakh crore-worth credit guarantee scheme, including Rs 50,000 crore for health sector in Covid-affected areas. The economic relief measures have been announced to perk up the economy that is opening up after the second wave-induced lockdown.
Of the eight announcements made on Monday, four are new, while one is specific to health infrastructure, Sitharaman said. "Under the Credit Guarantee Scheme, which is a new scheme, loans will be given to the smallest borrowers by microfinance institutions. A maximum of Rs 1.25 lakh will be lent. The focus is on new lending and not on repayment of old loans," the finance minister said.
Credit guarantee scheme
A new scheme to give up to Rs 1.25 lakh loan to 25 lakh small borrowers at lower interest rates and promised support to the tourism sector in the form of a Rs 10 lakh loan to travel agencies and Rs 1 lakh loan to tourist guides are also part of the announcements.
The interest rate under the new Credit Guarantee Scheme is 2 per cent below the RBI prescribed rate, with a loan duration of three years. An estimated 25 lakh people will benefit from the scheme.
The new Credit Guarantee Scheme will also reach out to the smallest of the small borrowers in the hinterland, including in small towns.
Sitharaman has also announced Rs 100 crore loan to the health sector at the rate of 7.95 per cent as India braces for a possible third wave of the rampaging virus.
Tourism
Once international travel resumes, the first five lakh tourists who come to India will not have to pay visa fees. Scheme applicable till March 31, 2022, or will be closed after distribution of first five lakh visas. One tourist can avail benefit only once.
Atmanirbhar Bharat Rozgar Yojana
Atmanirbhar Bharat Rozgar Yojana has now extended from June 30, 2021, to March 31, 2022. "Over 21.4 lakh people of nearly 80,000 establishments have already benefited from the scheme," Sitharaman said.
Emergency Credit Line Guarantee Scheme (ECLGS)
Besides, she said, additional Rs 1.5 lakh crore limit enhancement done for Emergency Credit Line Guarantee Scheme (ECLGS).
The existing limit for ECLGS scheme, announced as part of Rs 20-lakh crore Atmanirbhar Bharat Abiyan package in May 2020, was Rs 3 lakh crore.
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 are 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.
