ECLGS 2.0 will provide 100% guaranteed collateral-free additional credit
Taking cognizance of CII’s recommendation, the government’s decision to extend the Emergency Credit Line Guarantee Scheme (ECLGS) for the 26 stressed sectors identified by the Kamath Committee is commendable despite the challenges of pandemic and recession-hit economy.
“It is heartening to note that despite fiscal constraints, the government chose to hasten the recovery process by spending an additional Rs.2.65 lakh crore, thus taking the cumulative fiscal stimulus (till date) to Rs.17.2 lakh crore or 9% of GDP,” said CII President Uday Kotak.
In addition, the RBI has also announced measures amounting to Rs.12.7 lakh crores, to date, he said in welcoming the Government’s approval of PLI scheme on 12 Nov 2020.
Designed on the lines of a similar scheme existing for the MSMEs, ECLGS 2.0 will provide 100% guaranteed collateral-free additional credit, thus helping to provide interim liquidity support to these sectors, till demand recovers.
The significant steps to energise employment in both formal and informal sectors of the economy are welcome.
“The announcement of the marquee Atmanirbhar Bharat Rozgar Yojana by elucidating a slew of relief measures to facilitate the hiring of new employees by EPFO registered organisations is expected to the incentivise new employment in the formal sector,” said Kotak.
“Along with an increased outlay of Rs 10,000 crore under PM Garib Kalyan Rozgar Yojana which will accelerate the rural economy, the two measures will improve the employment outlook of the economy significantly,” he believes.
The 12-step package will go a long way towards economic recovery and takes forward the earlier measures taken to stabilize the economy, added CII President Designate T V Narendran.
The emphasis on key sectors with high elasticity such as construction and real estate along with measures to provide adequate credit will kickstart investments and job creation. Downstream impact on sectors such as steel and cement can be considerable going forward, he said.
“It’s a “sniper” approach to address specific issues rather than a carpet bombing one, added CII Vice President Sanjiv Bajaj who is also the Chairman & Managing Director of Bajaj Finserv.
“Supply-side measures are addressed for stressed sections of society as well as the economy. The Government has done well to support businesses and encourage them to expand new hiring.
“Each of the initiatives announced on 12 Nov 2020 would play a role in getting the engines of growth running again,” he said. #incentives #exports #manufacturing #infrastructure /fiinews.com
