Finance Minister’s Press Conference 28th June, 2021

Economic Relief From Pandemic

1.1 Lakh Cr Loan Guarantee Scheme for COVID Affected Sectors

Health Sector: Rs. 50,000 crore

Aimed at upscaling medical infrastructure targeting underserved areas.

• Guarantee cover for expansion and new projects related to health/medical infrastructure in cities other than 8 metropolitan cities.

• Guarantee coverage: 50% for expansion & 75% for new projects

• For Aspirational Districts, guarantee cover of 75% for both new projects and expansion.

• Maximum loan: Rs. 100 crore; Guarantee duration: Up to 3 years

• Interest rate capped at 7.95%

• Guarantee by National Credit Guarantee Trustee Company Limited

Other Sectors: Rs. 60,000 crores

• Interest rate capped at 8.25% p.a.

• Decisions at a later stage based on evolving needs

Normal interest without guarantee cover is 10-11%

Additional 1.5 lakh Cr for Emergency Credit Line Guarantee Scheme

• Launched as part of Atma Nirbhar Bharat Package in May 2020.

• ECLGS-1.0, 2.0, and 3.0 have resulted in credit disbursal of 2.69 lakh Crore to 1.1 crore units by 12 Public Sector Banks, 25 Private Sector Banks, and 31 Nonbanking Financial Companies

• Contact intensive sectors already covered and shall be continued. Rs 4,000 crore given to these sectors through this window so far

• Limit of admissible guarantee and loan amount proposed to be increased above existing level of 20% of outstanding on each loan

• Sector-wise details will be finalized as per evolving needs

• Overall cap of admissible guarantee to be raised from Rs. 3 lakh crore to Rs. 4.5 lakh crore

Credit Guarantee Scheme to Facilitate Loans to 25 Lakh Persons Through Micro Finance Institutions (MFIs)

• Guarantee will be provided to Scheduled Commercial Banks for loans to new or existing NBFC-MFIs or MFIs for on-lending up to Rs 1.25 lakh to approximately 25 lakh small borrowers

• Interest Rate on Loans from banks to be capped at MCLR plus 2%

• Maximum loan tenure 3 years, 80% of assistance to be used by MFI for incremental lending, interest at least 2% below maximum rate prescribed by RBI

• Focus on new lending, not repayment of old loans

• Loans to borrowers to be in line with extant RBI guidelines such as a number of lenders, borrower to be a member of JLG, ceiling on household income & debt

• All borrowers (including defaulters up to 89 days) eligible

• Guarantee cover for funding provided by MLIs to MFIs/NBFC-MFIs till March 31, 2022, or till guarantees for an amount of Rs.7,500 crore are issued, whichever is earlier.

• Guarantee up to 75% of default amount for up to 3 years through National Credit Guarantee Trustee Company (NCGTC)

• No guarantee fee to be charged by NCGTC

Reviving Tourism: Financial support to more than 11,000 Registered Tourist Guides/Travel and Tourism Stakeholders

• Under the new Loan Guarantee Scheme for COVID Affected Sectors, working capital/personal loans will be provided to people in the tourism sector to discharge liabilities and restart businesses impacted due to COVID-19

• The scheme will cover:

✓ 10,700 Regional Level Tourist Guides recognized by Ministry of Tourism and Tourist Guides recognized by the State Governments

✓ Travel and Tourism Stakeholders (TTS) recognized by the Ministry of Tourism (904)

• Loans will be provided with a 100 % guarantee up to the following limits:

• Rs. 10,00,000 for TTS ( per agency)

• Rs. 1,00,000 for tourist guides licensed at the Regional or State level

• No processing charges, waiver of foreclosure/prepayment charges. No additional collateral requirement

• Scheme to be administered by the Ministry of Tourism through NCGTC

Free Tourist Visa to 5 Lakh Tourists

• 10.93 million foreign tourists visited India in 2019, spent the US $ 30.098 billion on leisure and business.

• Average daily stay for a foreign tourist in India is 21 days. The average daily spending of a tourist in India is around $34 (Rs 2400).

• Once Visa issuance is restarted, the first 5 lakh Tourists Visas will be issued free of charge.

• Benefit will be available only once per tourist

• The scheme will be applicable till 31st March 2022 or till 5,00,000 visas are issued, whichever is earlier

• Total financial implications- Rs 100 Crore

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