The government on Wednesday extended the scheme of Rs. 4.5 ECLGS for supporting the MSMEs with the funds’ shortage, and promote exports, industry bodies till March 31, 2022. The decision was made to support the small and medium enterprises with funds shortage and promote exports, said the industry bodies. The scheme was launched by the finance ministry last year. The decision will help achieve the USD 400 billion export target for this fiscal year, Apparel Export Promotion Council (AEPC’s) chairman, A Sakthivel said.
During the second wave of the pandemic, the effect was much worse since we were not able to serve the global orders due to the lockdown restrictions, the extension will definitely ramp up the supply chain as we are trying to honor export orders ahead of the festive season, he added.
The chairman welcomed the decision of capital infusion of Rs 4,000 crore over the period of five years in the ECGC. He said that the government has made a timely move since the uncertainties and liquidity in the global trade are increasing the list of defaulters, making the exporters jittery.
The finance ministry announced the scope to expand the Emergency Credit Line Guarantee Scheme to Rs. 4.5 crore on Wednesday. Through this capital infusion, the government is targeting micro, small and medium enterprises that are struggling with liquidity issues due to the COVID-19 pandemic. Through the extension of this scheme, the MSME will get support from the government directly.
The chairman of Association of Inspiring Syndicate of Entrepreneurs, Yogesh Pawar, stated that earlier, the disbursement at the ends of the banking institutions was not efficient due to which the government was not able to meet the targeted amount for MSMEs, and this is the primary reason behind extending the scheme.
He added that there is no doubt that it had helped MSMEs in the post-pandemic period as they have been struggling with the working capital requirement and the increase in raw material prices at the same time, but an effective tracking system can release the disbursement timely.