New Delhi, June 30 (IANS) The Centre has disbursed approximately Rs 1 lakh crore under the Emergency Credit Line Guarantee Scheme 5.0 (ECLGS) to enable MSMEs and other industries to tide over the liquidity crunch during the West Asia crisis, MSME Secretary Bharat Khera said on Tuesday.
Speaking at a Confederation of Indian Industry (CII) event here, Khera said, “Our effort has been to ensure that MSMEs don’t suffer unduly in such times.”
Khera said while disruptions caused by the West Asia crisis had affected some export consignments and cash flows, the government has already introduced the Emergency Credit Line Guarantee Scheme to help MSMEs tackle liquidity and working capital challenges. He added that the government had also engaged with the Department of Revenue and the shipping authorities to address logistical bottlenecks arising from the crisis
“I believe our industry is inherently very resilient. Whether it was during COVID or the recent West Asia crisis, it found corrective measures on its own and identified alternative sources. By learning from these supply chain disruptions, our MSME sector has become even more robust and resilient,” he observed.
The Cabinet approved the ECLGS 5.0 on May 5 to support businesses facing short-term liquidity issues due to the Middle East conflict. The scheme aims to facilitate additional credit flow of up to Rs 2.55 lakh crore, including Rs 5,000 crore earmarked for the airline sector.
Under the scheme, the government provides credit guarantee cover of 100 per cent for MSMEs and 90 per cent for non-MSMEs to lending institutions through the National Credit Guarantee Trustee Company Ltd (NCGTC) for loans given to eligible borrowers. The step has been taken to ensure that no jobs are lost during the crisis phase.
He pointed out that after the West Asia crisis, the industry explored new markets for exports. India is also entering several free-trade agreements (FTAs) and this will bring enormous opportunities for MSMEs. Many markets which were earlier closed, are now open for the industry, he added.
Khera further stated that the government will examine the possibility of creating an appropriate export finance arrangement for micro, small and medium enterprises (MSMEs) in consultation with the Department of Financial Services (DFS), industry and Export Promotion Councils, after exporters flagged working capital constraints arising due to the longer cycle of realisation of export payments.
“We can perhaps work on it in consultation with the industry as well as with the Department of Financial Services. Many of the MSMEs today are also members of the Export Promotion Councils, we can certainly work out an arrangement for export finance,” the Secretary added.
–IANS
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