MSMEs in Tamil Nadu, Maharashtra & Gujarat top as ECLGS beneficiaries

New Delhi, 29 Dec (KNN) As per a report by the State level Banker’s Committee (SLBC – Gujarat), Tamil Nadu, Maharashtra and Gujarat are the top three states which has borrowed the highest under the Emergency Credit Line Guarantee Scheme (ECLGS).

All the guarantees under this scheme is an aid to micro, small and medium enterprises (MSMEs) impacted by the covid-19 which have been issued by the National Credit Guarantee Trust Company Limited (NCGTCL).

Under the ECLGS, INR 20,862 crore was borrowed by Gujarat, a state which is home to 2.18 lakh MSMEs as of July 2021, published in TOI.

Commenting on this position of Gujarat, M M Bansal, convener, SLBC, Gujarat said, “Gujarat is a manufacturing-heavy state with a high number of of MSMEs. The emergency credit extended by way of government guarantees provided to businesses came as a huge booster to industries that were struggling for working capital due to pandemic-induced disruptions.”

He stated that if this scheme was not initiated the industrial units would have faced grave difficulties leading to survival crisis.

Expressing his view on this matter, Chintan Thaker, Chairman of Assocham Gujarat state council told TOI that, “Exports in various sectors provided a cushion to most manufacturers. While manufacturers and businesses across Gujarat leveraged this opportunity, they faced higher freight and container costs. Costs of raw materials such as cotton, yarn, steel,cement, basic chemicals, specialty chemicals or even coal, have gone up drastically. Most of these materials were not available on credit, as a result of which MSMEs had to make immediate payments, pushing working capital needs further.”

The ECLGS seeks to provide much needed relief to the MSME sector by incentivizing MLIs to provide additional credit of up to INR 3 lakh crore at low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.