Finance minister Nirmala Sitharaman will address a press conference at 3 pm on Monday. The Centre is likely to announce some relief measures for the sectors severely affected by the second wave of coronavirus pandemic, according to reports. There has been reports that government may increase the limit for Emergency Credit-Linked Guarantee Scheme (ECLGS) to Rs 5 lakh crore from the current Rs 3 lakh crore. The corpus of government guarantee is also likely to go up, the CNBC News18 reported. In May, 2020, the Cabinet had given its nod to around Rs 41,600 crore government guarantees under the ECLGS. The government is now likely to seek a Cabinet nod to increase the limit.
The Department of Financial Services (DFS) Secretary Debasish Panda recently told CNBC-TV18 that the government is open to raising the limit. In the wake of the coronavirus pandemic, the government earlier announce this guaranteed loan scheme as part of Rs 20.97 lakh crore-economic package. The scheme was later tweaked to be made applicable for companies with an annual turnover of Rs 250 crore as against the earlier threshold of Rs 100 crore.
Sitharaman could also announce the final outline of much-awaited ‘bad bank’ — the National Asset Reconstruction Company Limited, and and the entity which will manage the bad loans — the India Debt Management Company Ltd.
The second wave of coronavirus pandemic has severely hit the country. With several states announcing local lockdowns to prevent the virus spread, the recovery process from the devastating impact of first wave of COVID-19 has become difficult for many — especially for the tourism, hospitality sector and MSMEs. To help them overcome the financial stress, the ECLGS scheme was expanded to include healthcare and aviation. The validity of the scheme too was extended to September 30.
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The industry chamber PHDCCI earlier urged the government to announce a “substantial" stimulus package to support economic growth battered by the second wave of COVID-19. It has submitted 17 recommendations to finance minister Nirmala Sitharaman on financial and structural support to micro, small and medium enterprises (MSMEs) such as extending the moratorium period and offering concessional rates of interest on borrowings.
“The second wave of pandemic COVID-19 is spreading faster than the first wave and affecting almost every household in India. The industry body has recommended a substantial stimulus package to support the economy, trade, and industry in this extremely difficult time," the chamber said in a statement.
In 2020, the Centre announced a host of economic stimulus packages to restart the economy after months of strict nationwide lockdown. In April, the finance ministry eased rules for capital expenditure by government departments to try to boost spending in the economy.