Srinagar: After years of struggle, Mukhtar Ahmad, 34, launched the Plaster of Paris (PoP) manufacturing unit back in 2018.
He borrowed huge loans from banks to procure the raw material. He launched a promotional blitzkrieg to market his product in the valley.
Come 2019, his business suffered huge losses. He was struggling to pay monthly loan instalments. Enter Emergency Credit Line Guarantee Scheme (ECLGS) scheme, Mukhtar’s business got a new lease of life.
“I was very much worried about the future. The borrowings were swelling. Then came Emergency Credit Line Guarantee Scheme (ECLGS). It was a lifeline for medium and small companies across the country,” he said.
Union Finance Ministry introduced the Emergency Credit Line Guarantee Scheme (ECLGS) in May 2020. It was intended to provide a booster dose to the pandemic-hit economy.
Under this scheme, the Centre government announced an emergency credit line to the Business Enterprise/MSME up to 20 per cent of the total outstanding amount.
Data accessed by The Kashmir Monitor reveal that as many as 67567 MSMEs in Jammu and Kashmir were provided with the financial assistance of Rs 2222.72 crore for business revival.
Like other parts of the country, lockdown imposed during the Covid impacted industrialists in Jammu and Kashmir. MSME sector was the worst hit with sales declining and overhead cost increasing.
Under the scheme, the Centre earmarked Rs.3 lakh crore. The Centre proposed to pay unsecured loans to MSMEs and other companies to offset the losses suffered due to COVID-19 induced lockdowns.
In her budget speech, Union Finance Minister Nirmala Sitharaman proposed to extend the Emergency Credit Line Guarantee Scheme (ECLGS) till the end of March 2023, with an expanded guarantee cover of Rs 5 lakh crore.
As per the document, a total of 11261 MSMEs including 8314 micro, 2794 small and 194 medium enterprises have been registered in Jammu and Kashmir since 2015 through Udyog Aadhar Portal.
Moreover, 36507 MSMEs including classified and unclassified have come up between July 2020 and July 2021 in Jammu and Kashmir.
As per the document, an additional Rs 142.46 lakhs were provided to 26 beneficiaries in Jammu and Kashmir to revive units under Credit Guarantee Scheme for Subordinate Debt (CGSSD).
An official from the Department of Industries and Commerce said the administration has prioritized the revival of business.
“Last year the administration announced to grant 30 percent margin money of the total soft loan to revive sick units. Similarly, the MSMEs, which have suffered during the lockdown, have been incentivized under ECLGS ,” he said.