Quick News Bit

Emergency Credit Line Guarantee Scheme supported MSMEs during COVID, led to remarkable credit growth: Economic Survey

0
Finance Minister Nirmala Sitharaman speaks in the Lok Sabha on the first day of Budget Session of Parliament

Finance Minister Nirmala Sitharaman speaks in the Lok Sabha on the first day of Budget Session of Parliament
| Photo Credit: –

The recovery of India’s micro, small, and medium enterprises is advancing swiftly, with the Emergency Credit Linked Guarantee Scheme (ECLGS) offsetting the impact of the COVID-19 shock on the units through robust credit disbursement, as per the Economic Survey 2022-23 tabled in Parliament on January 31.

India has more than six crore micro, small and medium enterprises that employ close to 12 crore workers across sectors and industries while contributing nearly 35% to the country’s gross domestic product (GDP).

Also Read | Economic Survey 2022-23 live updates | Economic survey estimates 7% GDP growth in 2022-23

According to the Survey, “The credit growth to the micro, small and medium enterprises sector has been remarkably high, over 30.6% on average during January-November 2022, supported by the extended Emergency Credit Linked Guarantee Scheme of the Union government.”

“The recovery of MSMEs is proceeding apace, as is evident in the amounts of Goods and Services Tax (GST) they pay, while the Emergency Credit Linked Guarantee Scheme is casing their debt servicing concerns,” it added.

In FY21, the government announced the Emergency Credit Linked Guarantee Scheme, which succeeded in shielding micro, small and medium enterprises from financial distress.


Also Read | In pandemic shock, critical lessons for MSMEs

Quoting a recent CIBIL report, the Survey said it showed that the scheme has supported MSMEs in facing the COVID-19 shock, with 83% of the borrowers that availed the ECLGS being micro-enterprises. Among these micro units, more than half had an overall exposure of less than ₹10 lakh.

Furthermore, CIBIL data also showed that ECLGS borrowers had lower non-performing asset rates than enterprises that were eligible for ECLGS but did not avail of it, the Survey pointed out.

The GST paid by MSMEs after declining in FY21 has been rising since and now has crossed the pre-pandemic level of FY20, reflecting the financial resilience of small businesses and the effectiveness of the pre-emptive government intervention targeted towards MSMEs.

For all the latest Business News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment