Nearly 29 per cent micro, small and medium enterprises (MSMEs) in Punjab have opted out from the Emergency Credit Line Guarantee Scheme (ECLGS) rolled out by Centre as part of the Self-Reliant India Mission package for the lockdown-hit industry.
Of the 1.64 lakh eligible MSMEs in Punjab, 46,909 have opted out of the multi-crore credit scheme, which offers funding at a concessional rate of 9.25 per cent.
The scenario at the national level is better with just over 20 per cent or 10 lakh MSMEs, out of total 46.38 lakh eligible, not opting for the emergency credit line. The MSMEs that opted out (across India) were collectively eligible for Rs 55,874 crore in loan, as per official statistics till July 6.
Going by the ECLGS daily data of states as on July 6, the eligible borrowers had a total outstanding loan amount of Rs 5.40 lakh crore by the cut off date of February 29 as per the scheme. With 20 per cent of this amount to be extended as loan without collateral under ECLGS, the total amount that is to be given as loans under the scheme is pegged at Rs 1.08 lakh crore so far.
Punjab is at third position among the states and Union Territories in sanctioning of loans under the scheme. It has sanctioned loans under ECLGS to 94.9 per cent of the MSMEs that have said yes to the scheme. The state has sanctioned Rs 2,156 crore to 1.11 lakh MSMEs and disbursed nearly Rs 1,134 crore to 51,933 of them.
‘Want interest benefit, not funds’
All Industries Trade Forum national president Badish Jindal, meanwhile, said that majority of units which have “good accounts” are not opting for the scheme.
“Banks are under pressure to achieve targets and are approaching them. But, the production is between 25 to 30 per cent, labour is on call, there are no new orders. In these conditions, many MSMEs don’t want to enhance the advances. As there is no work now, there is risk that the MSMEs will not be able to pay back,” said Jindal, who said he opted for availing the loan in one account and gave in writing that he did not want the loan for another account.
“We are not demanding funds. We were demanding interest benefit,” added Jindal.
Ludhiana-based United Cycle and Parts Manufacturers Association president D S Chawla said, “We don’t want the loan. We want subsidy. In the ECLGS, moratorium period of one year is okay if interest is not to be paid during that time. The repayment period after that should be ten years instead of three years. Otherwise, it is like taking a loan to repay the outstanding loan. It will take time for the units to resume operations.”
Chawla also said that the MSMEs opting for loan were also being made to give an undertaking that out of the new loan they will have to pay the interest for the months which was deferred as per government guidelines due to lockdown.
Top loan sanctioning states, UTs
Meanwhile, the Union Territory of Puducherry is at number one in the list of top loan sanctioning states and UTs, with 118 per cent sanction of loans to eligible borrowers.
In Puducherry, there are 13,966 eligible borrowers, out of which 4,870 opted out, leaving behind 9,096 eligible borrowers behind. But as per the statistics, Puducherry has sanctioned loans to 10,740 borrowers.
Explaining the statistics, a functionary in the Punjab Industries Department said that the percentage was likely to have surpassed 100 per cent mark with a number of MSMEs who had opted out, later deciding to avail the loans.
Goa is at number two by sanctioning loans to 96.3 per cent of the eligible MSMEs.
Jharkhand at top in disbursal
Jharkhand, which has sanctioned loans to 85.92 MSMEs, is at top in terms of disbursement with an achievement rate of 57.25 per cent. Punjab is in seventh place in terms of disbursement of sanctioned loans.
Kerala has disbursed loans to 52.21 per cent, followed by Goa (48.68 per cent), Karnataka (47.86 per cent), Himachal Pradesh (45.68 per cent), Uttar Pradesh (45.46 per cent) and Punjab (44.06 per cent). Punjab Industries and Commerce department last month had asked Deputy Commissioners across the state to “convene District Level Bankers Committee (DLBC) meeting and review the same on urgent basis, so as to achieve the target of 100 per cent sanction of loans by July 15 and 100 per cent disbursement of loans July 31.”
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