Centre announces Rs 1.1 lakh crore credit guarantee scheme for COVID-affected areas

To bring the economy back on track, the government on Monday announced multiple economic relief measures.

Addressing a press conference, Union Finance Minister Nirmala Sitharaman, "We are announcing about 8 economic relief measures, of which four are absolutely new & one is specific to health infrastructure. For Covid-affected areas, Rs 1.1 lakh crores credit guarantee scheme and Rs 50,000 crores for health sector."

"Under Credit Guarantee Scheme, which is a new scheme, 25 lakh people to be benefitted. Loan to be given to the smallest borrowers by Microfinance Institutions. A maximum Rs 1.25 lakhs amount to be lent. Focus is on new lending & not on repayment of old loans," she added.

The schemes entail the enhancement of existing relief measure such as ECGLS and support for state governments. Besides, four new measures were announced to provide loans to micro finance credit users as well as the tourism industry.

Sitharaman said that the ECLGS scheme will be enhanced by Rs 1.5 lakh crore. She said that the first 5 lakh tourist visa will be issued free of charge. This step will be taken once the visa issuance start.

Apart from these, the Atmanirbhar Bharat Rozgar Yojana has been extended till March 31, 2022, entailing the government nearing PF liability of employees and employers depending on the size of the organisation.

"The interest rate under the new Credit Guarantee Scheme is 2% below RBI prescribed rate, with a loan duration of 3 years. Focus on new loans, stressed borrowers except NPAs to be covered," she said.