Over 62% of ECLGS amount for MSMEs disbursed in Karnataka, industry calls for relaxations

Micro, small and medium enterprises (MSMEs)  believe that as the demand for credit has been growing, the eligibility criteria under the Emergency Credit Line Guarantee Scheme (ECLGS) has been restrictive, leading to a gap.

One-third of the Centre's Rs 3 lakh crore ECLGS for MSMEs remained unutilised till November 12, following which the government decided to extend the scheme till March 31, 2021 and expand it to more sectors under ECLGS 2.0.

In Karnataka, the numbers were slightly better than the national figures, with 75 percent or Rs 8,029 crore of the eligible amount of Rs 10,695 crore under the ECLGS 1.0 scheme sanctioned as of October 30, though only 62.28 percent of the total amount had been disbursed.

Of the total 3 lakh eligible accounts, 1.46 lakh had received the amount, as per data from the state industries departments.

In the Peenya Industrial area, where 10,000 MSMEs manufacture everything from automobile parts to aerospace units, the benefits of ECLGS scheme and even the subordinate debt scheme under the Atmanirbhar Bharat package haven’t trickled down to many.

Micro, small and medium enterprises (MSMEs)  believe that as the demand for credit has been growing, the eligibility criteria under the Emergency Credit Line Guarantee Scheme (ECLGS) has been restrictive, leading to a gap.

One-third of the Centre's Rs 3 lakh crore ECLGS for MSMEs remained unutilised till November 12, following which the government decided to extend the scheme till March 31, 2021 and expand it to more sectors under ECLGS 2.0.

In Karnataka, the numbers were slightly better than the national figures, with 75 percent or Rs 8,029 crore of the eligible amount of Rs 10,695 crore under the ECLGS 1.0 scheme sanctioned as of October 30, though only 62.28 percent of the total amount had been disbursed.

Of the total 3 lakh eligible accounts, 1.46 lakh had received the amount, as per data from the state industries departments.

In the Peenya Industrial area, where 10,000 MSMEs manufacture everything from automobile parts to aerospace units, the benefits of ECLGS scheme and even the subordinate debt scheme under the Atmanirbhar Bharat package haven’t trickled down to many.

In fact, according to the Peenya Industrial Association, only 15 percent of the MSMEs in the area are eligible for the ECLGS 1.0, while none have availed the subordinate debt scheme.

Ramesha CS, proprietor of Sunrise Technologies, a manufacturing unit which makes engineering precision equipment and auto components, says that he wanted a credit line to revive the business, but was rejected under the ECLGS scheme because of an outstanding of over 60 days.