The central government is going all out to ensure that liquidity concerns of the micro small and medium enterprises (MSME) sector are addressed on priority under its Emergency Credit Line Guarantee Scheme (ECLGS).
As of June 12, 2020, public sector banks (PSBs) have sanctioned loans worth Rs 32,049.86 crore under the 100 per cent Emergency Credit Line Guarantee Scheme, out of which Rs 16,031.39 crore has already been disbursed.
This is a big jump from the previous day (June 11) when sanctions stood at Rs 29,490 crore and disbursement at Rs 14,690 crore, meaning that in just one day PSBs disbursed in excess of Rs 1,300 crore.
In a tweet, the office of Finance Minister Nirmala Sitharaman said, “As of 12 June 2020, #PSBs have sanctioned loans worth Rs 32,049.86 crore under the 100 per cent Emergency Credit Line Guarantee Scheme, out of which Rs 16,031.39 crore has already been disbursed.”
The ECLGS scheme is the biggest fiscal component of the Rs 20-lakh crore Self-Reliant India Mission package announced by Finance Minister Nirmala Sitharaman last month.
To ensure that the scheme achieve its objective of providing adequate liquidity to the MSME segment during the current difficult period, the finance ministry has regularly held meetings with the banks.
After PSBs, the government is also prodding the private banks to increase loans under the scheme. As part of this, Finance Minister Nirmala Sitharaman on Monday chaired a meeting with private banks and non bank financial institutions (NBFCs) to take stock of their preparedness to provide liquidity to the sector.
The Rs 16,000 crore disbursement has been made to a wide spectrum of MSMEs covering 4,24,000 accounts. The country's largest bank — State Bank of India (SBI) has been on the forefront of releasing loans under the scheme.
Earlier, the Narendra Modi government brought in several policy changes to boost the MSME sector. As part of the Rs 20 lakh crore package under the Atmanirbhar Bharat scheme, the Union Cabinet has already approved widening of the definition of the MSMEs..