The Centre on Sunday announced a 100% guarantee cover for loans up to Rs 2 crore to hospitals, nursing homes, clinics and medical colleges for setting up on-site oxygen generation plants.
The move comes against the backdrop of an unprecedented shortage of medical oxygen that crippled hospitals nationwide and led to scores of deaths during the second wave of Covid-19.
The loan to these sectors would be provided by expanding last year’s Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS), while the interest rate for the same would be capped at 7.5%.
"On account of the disruptions caused by the second wave of Covid-19 pandemic to businesses across various sectors of the economy, the government has further enlarged the scope of ECLGS,” the finance ministry said.
Read more: Indian Railways delivers 21,392 tonnes of oxygen to states through 313 Oxygen Express trains
The ECLGS scheme would be extended to the civil aviation sector also, a move that was described as “timely” by SpiceJet Chairman Ajay Singh as it could bolster the much-needed liquidity to these sectors which employ a large number of people.
The emergency credit scheme was announced last year to help small businesses tide over the crisis brought on by the pandemic and was valid till October 2020. It was subsequently extended till June 30.
As many as 26 stressed sectors, including hospitality, travel, tourism and sporting activities, were included in it. On Sunday, the same scheme was extended till September 30 or till the amount is issued fully.
Banks said loans of Rs 2.54 lakh crore have already been covered under the scheme, while the remaining Rs 45,000 crore would be issued under the relief announced on Sunday.
Reacting to the news, FICCI said it would have helped if a higher allocation would have been made under this scheme, as the industry body had requested that the quantum under ECLGS be doubled to Rs 6 lakh crore.
“We hope the Finance Ministry will keep a close watch on the situation and appropriate enhancements will be made in time, as required,” said FICCI President Uday Shankar.
The government also removed the current ceiling of Rs 500 crore of outstanding loan for eligibility under ECLGS with certain riders.
"Modifications in ECLGS would enhance the utility and impact of ECLGS by providing additional support to MSMEs, safeguarding the livelihoods and helping in a seamless resumption of business activity. These changes will further facilitate the flow of institutional credit at reasonable terms," the ministry said.
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