The government is unlikely to extend the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector beyond October even though the sanctioned amount so far is only nearly 65 per cent of the target, sources said.
The scheme is meant to provide financial support to businesses, primarily micro, small and medium enterprises (MSMEs), impacted by the slowdown triggered by the coronavirus pandemic.
The sources said the objective is to provide support to all those affected and if there are no takers for the scheme, there is no need to extend the scheme even though there is some room left.
On August 1, the government widened the scope of the scheme by doubling the upper ceiling of the loans outstanding and including certain loans given to professionals such as doctors, lawyers and chartered accountants for business purposes under its ambit.
To ensure more companies benefit, the upper ceiling of loans outstanding as on February 29 for being eligible under the scheme was increased to Rs 50 crore from Rs 25 crore. The maximum amount of Guaranteed Emergency Credit Line funding under the scheme was also raised to Rs 10 crore from Rs 5 crore.
