Big boost for hospitality sector as govt hikes ECLGS by Rs 50000 cr

The enhancement is expected to provide much-needed relief to enterprises in these sectors by incentivising lending institutions to provide additional credit of up to Rs 50,000 crore at a low cost, thereby enabling these business enterprises to meet their operational liabilities and continue their businesses.

Loans of about Rs 3.67 lakh crore have been sanctioned under ECLGS till August 5, 2022. The validity of the scheme is March 31, 2023.

"The ongoing pandemic has adversely impacted contact-intensive sectors, especially the hospitality and related sectors more severely. While other sectors were back faster on the path of recovery, demand continued to be subdued for these sectors for a longer period, suggesting the need for suitable interventions for their sustenance and recovery," the government said in a statement.

"Further, given their high employment intensity and their direct and indirect linkages with other sectors, their revival is also necessary for supporting overall economic recovery," it said.

"With high immunization levels, progressive roll-back of restrictions, and overall economic recovery, conditions are in place for sustained growth in demand for these sectors as well. This additional guarantee cover is expected to support the recovery of these sectors as well. This additional guarantee cover is expected to support the recovery of these sectors," it added.