NEW DELHI: The government on Saturday expanded the coverage of the guarantee-based top up loans for small businesses to include individuals such as dentists, doctors, shopkeepers and truck and cab owners, who had availed of loans from banks.
The eligibility criteria was also relaxed for 20% additional loan to those with outstanding credit facility of up to Rs 50 crore on February 29, which is twice the earlier cap, while the annual turnover threshold was raised from Rs 100 crore to Rs 250 crore.
On Friday, TOI was the first to report about the change in the eligibility criteria amid demands to expand the number of entities that can avail of the special facility to combat the impact of Covid-19 on their businesses.
“We expect another Rs 1 lakh crore of loans to flow,” finance minister Nirmala Sitharaman told reporters. In late May, the government had announced the Emergency Credit Line Guarantee Scheme and said that based on 100% guarantee, it expected around Rs 3 lakh crore of additional funding for small businesses.
So far, sanctions are estimated at a little under Rs 1.3 lakh crore with over Rs 87,000 crore disbursed. With the expanded coverage, the overall loan flow could be to the tune of Rs 2.6 lakh crore or so, financial services secretary Debasish Panda said.
While the scope of the scheme will now include individual businesses, Sitharaman said that a final call on extending the loan moratorium on home and personal loans taken by individuals was yet to be taken. In recent days, bankers are seeking an end to the loan moratorium offered to all buyers, which is due to be over at the end of August. The FM said that the government was in talks with RBI for restructuring of bank loans but refused to elaborate further.
She said that there was evidence of workers returning to work with industry representatives suggesting that 40-45% of the migrant workers had now returned.
Sitharaman also said that a meeting of the GST Council will be convened soon to work out a solution on GST compensation.