Additional funds under ECLGS for hospitality, related sectors to help continue operations: FHRAI
The government's approval for an additional Rs 50,000 crore under ECLGS for hospitality and related sectors will help businesses buy some more time to continue their operations, Federation of Hotel & Restaurant Associations of India said on Wednesday.
The Union Cabinet on Wednesday approved the enhancement in the limit of Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 50,000 crore from Rs 4.5 lakh crore to Rs 5 lakh crore to ensure low-cost credit flow to hospitality and related segments hit hard by the COVID pandemic.
''The additional line of credit was much needed by the hospitality sector which is still grappling with massive debts and is simultaneously trying to keep business running,'' Federation of Hotel & Restaurant Associations of India (FHRAI) Vice President Gurbaxish Singh Kohli said in a statement.
Travel has picked up and tourism destinations are seeing a revival, he said, adding, ''several hospitality establishments cannot sustain operations without sufficient liquidity, but the extended ECLGS could help businesses buy some more time to keep the wheels in motion.'' According to the government, the increase in ECLGS has been done on account of the severe disruptions suffered by hospitality and related enterprises due to the pandemic.
The ECLGS was announced in May 2020 in wake of the outbreak of COVID-19 to help various sectors, especially in the MSME segment, to get credit at a concessional rate of 7 per cent. Loans of about Rs 3.67 lakh crore have been sanctioned under ECLGS till August 5, 2022.
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