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ECLGS 2.0 announced for stressed sectors and further extended further till March 2021

Published: November 18, 2020

Ms. Nirmala Sitharaman, the Finance Minister, today announced 12 new stimulus measures as a part of “Atmanirbhar Bharat 3.0”. As a part of these measures, the ECLGS scheme has been extended till March 31, 2021. Last week, ECLGS 1.0 was extended till November 2020 or till Rs. 3 lakh crore has been sanctioned under the scheme (whichever is earlier). The ECLGS scheme was announced as a part of “Atmanirbhar Bharat Abhiyan” in May 2020. In addition to this, government has announced ECLGS 2.0 to provide the needed relief to stressed sectors due to covid-19.

The details of ECLGS scheme is as follows –

Care Rating’s view –. The scheme has been again extended as lockdowns are opening up gradually and demand is expected to increase during the ongoing festive season and the second half of FY21. The extension and launch of ECLGS 2.0 is expected to provide a further opportunity to such borrowers who have not availed the scheme so far, to obtain credit under the Scheme. The scheme is expected to provide a much needed relief by helping entities to sustain employment, meet liabilities and liquidity support to the MSME sector. It would need to be seen whether it makes sense to some of the existing borrowers which may be borrowing at a lower interest rate.

The bank credit growth from May 2020 (Rs.102.2 lakh crore) to October 2020 (Rs. 103.4 lakh crore) has been mainly supported by disbursements in ECLGS scheme. As on October 2020, disbursements under ECLGS scheme were Rs 1.52 lakh crore, which is higher than gross bank credit growth of Rs. 1.2 lakh crore (in absolute terms from May 2020 to October 2020).


List of 26 stressed sectors as identified by the Kamath Committee –

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