New Delhi: The Apparel Export Promotion Council (AEPC) on Thursday urged the government to immediately roll out its decision to widen the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) by increasing the outstanding dues limit to Rs 50 crore.
In a statement, the industry body also applauded the Reserve Bank of India’s decision to extend the provision of restructuring of MSME loans.
“This is a very timely decision as thousands of small and medium enterprises are facing a severe financial crisis and the extension of the provision to restructure MSME loans for borrowers with loans outstanding up to Rs 25 crore till 31 March 2021 will give a fresh lease of life to many,” AEPC Chairman A. Sakthivel said.
He said that the MSME sector, which plays an important role in the growth of the Indian economy – contributing 28 per cent of the GDP and 40 per cent of exports while creating jobs for 11 crore people, needs additional funding to get over their cash flow problems, which is disrupting normal operations.
Noting that the government has proactively provided for additional funding of up to Rs 3 lakh crore at a concessional rate through ECLGS for the MSME sector, Sakthivel said that considering the amount sanctioned, till date, wis less than half, the Finance Ministry last week expanded the scheme’s scope by increasing the outstanding loan limit to Rs 50 crore from Rs 25 crore, and turnover limit to Rs 250 crore from Rs 100 crore, for extending the benefit to more borrowers.
“While we have requested for increasing the outstanding loan limit to Rs 100 crore and doing away with the turnover limit for exporters, we request the government to execute the partial relief which it has provided. Necessary instructions need to be sent urgently to the banks for executing the revised guidelines under ECLGS,” he said.
He added that the liquidity problem at the working capital front is not only hurting normal functioning but is also impacting new job orders and credibility.