Guaranteed loan scheme size may rise to Rs 5 lakh crore
The move comes as loan sanctions under the ECLGS near the Rs 3-lakh-crore mark after the government allowed the funds to be used by a host of other sectors instead of limiting it to micro, small and medium enterprises, the original target group.
Besides, sources told TOI, hospitals — both greenfield and brownfield — will also be covered by the scheme as the government looks to ramp up health infrastructure across the country. In these cases, the maximum permissible loan amount would be Rs 100 crore and will be applicable for facilities in non-Metro cities, sources said.
In case of greenfield projects, up to 75% of the funding will be guaranteed by the National Credit Guarantee Trustee Company, while 50% of the loans will be covered where existing facilities are being scaled up.
Separately, the Reserve Bank of India has also announced a liquidity window to aid the healthcare sector.
The finance ministry is in the process of getting the clearances required to expand the scheme and is expected to be tasked with powers to initiate further measures in the coming months, sources said.
The government believes that a guarantee-driven approach is a cost-effective tool to support “viable” businesses without extracting too much fiscal cost.
Amid a growing clamour for a fresh stimulus, last month, finance minister Nirmala Sitharaman had told TOI that there was scope within existing schemes to meet the requirements for higher government support as the Budget measures had also not been fully implemented.
Besides, the government believes that it is the poor who need the most support at this time given that their livelihood and savings have been severely impacted.
Government sources pointed to a host of schemes — be it through free foodgrains or expedited settlement of claims under the PM Jan Dhan Yojana without insisting on a death certificate from a municipal body. Even the Rs 55 lakh for frontline workers are being speeded up with delays seen to be on account of tracking of the nominee.
Although industry lobby groups have been demanding a host of concessions and boosters, including printing of money, the government believes that there are enough weapons in its armoury to spur demand.
Sitharaman is holding regular interactions with government departments and public sector companies to push capital expenditure with a view to boost demand for sectors such as steel and cement, while also creating jobs.