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Emergency Credit Line Guarantee Scheme (ECLGS) 4.0

  • IASbaba
  • June 3, 2021
  • 0
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Emergency Credit Line Guarantee Scheme (ECLGS) 4.0

Part of: GS Prelims and GS -III – Economy 

In news

About ECLGS 4.0

  • 100% guarantee cover to be provided on loans, in hospitals/nursing clinics/medical colleges/homes, up to Rs.2 crore. 
  • Loan can be utilized to set up on-site oxygen generation plants.
  • Additional ECLGS assistance up to 10% of outstanding as on February 2020 to borrowers who are covered under ECLGS 1.0.
  • Ceiling of Rs. 500 Cr. of loan outstanding is removed. Assistance will be limited to 40% or Rs.200 crore, whichever is lower.
  • Civil Aviation sector will be eligible under ECLGS 3.0. 
  • Validity of ECLGS extended to Sept 30 2021 or till guarantees for ₹3 trillion are issues

Significance of the move

  • ECLGS 4.0 will enhance the utility and impact of ECLGS by providing additional support to MSMEs. 
  • It will safeguard livelihoods.
  • It will help in the resumption of business activity
  • It will facilitate flow of institutional credit at reasonable terms.

Important value additions 

Emergency Credit Line Guarantee Scheme (ECLGS)

  • ECLGS was launched under Atmanirbhar Bharat Abhiyan in May 2020. 
  • Objective: To overcome the distress caused on economy due to lockdown. 
  • It helped different sectors by providing credit to them. 
  • Credit was provided to them for four years besides one year moratorium period on principled repayment.

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