The Indian apparel industry has welcomed the Union Government’s announcement of extending Emergency Credit Line Guarantee Scheme (ECLGS) for eligible MSMEs including borrowed credit under ECLGS 1.0 to 5 years.
After extending the ECLGS loan to 5 years, the interest can be repaid only for the first 24 months with repayment of principal and interest in 36 months.
The Government also announced a three-month extension of its Rs. 3 lakh crore ECLGS to 30 September 2021, from 30 June 2021, or till guarantees for an amount of Rs. 3 lakh crore are issued under the fourth revision of the scheme dubbed ECLGS 4.0.
Considering these initiatives as the need of the hour, Raja M. Shanmugham, President, Tirupur Exporters Association (TEA), said that it will be really beneficial for the apparel manufacturers.
He also added that in the Resolution Framework 2.0 for COVID-related Stressed Assets of MSMEs, the exposure of up to Rs. 25 crore is only eligible for restructuring and this limit should be extended to all MSMEs, as per the MSME definition of Government of India, as all MSMEs have been affected in the past one year.
“Extension of Interest Equalisation Scheme (available up to 30 June 2021) for next 3 years considering the COVID impact on the clothing manufacturing sector is also required. We also request Government to work on requisition for the long pending announcement of Remission of Duties and Taxes on Export Products (RoDTEP) rates for the requirement of apparel sector to help the units to quote the prices accordingly,” said Raja.