Govt extends credit scheme for MSMEs

The Emergency Credit Line Guarantee Scheme (ECLGS) that provided much needed additional credit to over 1.3crore MSMEs will be extended till March 2023 with its guarantee cover expanded by Rs 50,000crore to Rs 5 lakh crore, Finance Minister Nirmala Sitharaman said on Tuesday.

The additional amount will be exclusively earmarked for the hospitality and related segments to help them recover to pre-pandemic levels.

Presenting the Budget 2022-23 in Parliament, the Finance Minister said the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be revamped with required infusion of funds.

“This will facilitate additional credit of Rs 2 lakh crore for micro and small enterprises and expand employment opportunities,” she said.

To help the micro, small and medium enterprises (MSME) sector become more resilient, competitive and efficient, Sitharaman said a Raising and Accelerating MSME Performance (RAMP) programme will be rolled out with a Rs 6,000 crore outlay spread over 5 years.

“Hospitality and related services, especially those by micro and small enterprises, are yet to regain their pre-pandemic level of business.

“Considering these aspects, the ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000crore to a total cover of Rs 5 lakh crore with the additional amount being earmarked exclusively for hospitality and related sectors,” the Finance Minister said.

Gravely disappointing, say hoteliers

The tourism and hospitality industry on Tuesday termed the Union Budget 2022-23 as ‘gravely disappointing’, saying the measures announced by Finance Minister Sitharaman were not enough to support the sector that has been crippled by the COVID-19 pandemic.

In her Budget 2022-23 speech, Sitharaman had acknowledged that hospitality and related services, especially those by micro and small enterprises, are yet to regain their pre-pandemic level of business.

“Considering these aspects, the ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000crore to the total cover of Rs 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises,” she said.

Reacting to her announcement, Federation of Hotel & Restaurant Associations of India (FHRAI) Vice President Gurbaxish Singh Kohli said, “However, this is just a drop in the ocean for a sector that has been severely battered. Given the massive damages that decimated the entire sector’s ecosystem, these measures are not adequate to bridge the losses”.

National Restaurant Association of India (NRAI) President Kabir Suri, however, said the extension of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023 may ease current liquidity issues only for some businesses, which have existing credit lines or outstanding sanction available loans. “It was very disappointing to see that no specific announcements were made for the restaurant industry,” he added.

Confederation of Tourism Professionals President Subhash Goyal said, “Nothing concrete has been announced and this industry is bleeding for the last three years. The tourism industry was expecting some relief in this Budget but we are really disappointed”.

EaseMyTrip Co-founder Rikant Pittie said, “International travel has been severely impacted by the pandemic, which is why we are pleased with the introduction of e-passports with embedded chips”. (PTI)