Cabinet clears ₹50,000-crore boost for hospitality sector
New Delhi: The Union Cabinet on Wednesday enhanced the corpus of sovereign-guaranteed credit facility for small enterprises, Emergency Credit Line Guarantee Scheme (ECLGS), from ₹4.5 lakh crore to ₹5 lakh crore, exclusively for the hospitality sector.Also Read: Cabinet clears interest rebate of 1.5% on short-term farm loansUnion finance minister Nirmala Sitharaman in her Budget speech this year announced that the scheme for micro, small medium enterprises (MSMEs) will be extended by one year up to March 31, 2023 and the guaranteed cover would be expanded by ₹50,000 crore to a total of ₹5 lakh crore with the focus on sectors such as hospitality.“The Cabinet has approved the proposal to raise the limit of Emergency Credit Line Guarantee Scheme for travel, tourism and hospitality sector,” Union information and broadcasting minister Anurag Thakur said.So far, loans of about ₹3.67 lakh crore have been sanctioned under ECLGS till August 5, 2022, according to the Union finance ministry.“The increase has been done on account of the severe disruptions caused by Covid -19 pandemic on hospitality and related enterprises,” the finance ministry said in a statement on Wednesday. The additional amount of ₹50,000 crore will be made applicable to enterprises in hospitality and related sectors till validity of the scheme, which is March 31, 2023, it added. “The enhancement is expected to provide much needed relief to enterprises in these sectors by incentivizing lending institutions to provide additional credit of up to ₹50,000 crore at low cost, thereby enabling these business enterprises to meet their operational liabilities and continue their businesses,” it said.Abhishek A Rastogi, partner at law firm Khaitan & Co said: “The government’s decision to provide easy credit facility to the hospitality and tourism sector is timely as demand for these services are picking up and timely help will boost growth of the sector, which faced intense headwinds during the pandemic period.
