Emergency Credit Line Guarantee Scheme supported MSMEs during COVID, led to remarkable credit growth: Economic Survey

The micro, small and medium enterprises sector witnessed a credit growth of 30.6% on average during January-November 2022 due to ECLGS, according to Economic Survey tabled in the Parliament

The recovery of India's micro, small and medium enterprises is advancing swiftly, with the Emergency Credit Linked Guarantee Scheme (ECLGS) offsetting the impact of the COVID-19 shock on the units through robust credit disbursement, as per the Economic Survey 2022-23 tabled in Parliament on January 31.

India has more than six crore micro, small and medium enterprises that employ close to 12 crore workers across sectors and industries while contributing nearly 35% to the country's gross domestic product (GDP).

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According to the Survey, “The credit growth to the micro, small and medium enterprises sector has been remarkably high, over 30.6% on average during January-November 2022, supported by the extended Emergency Credit Linked Guarantee Scheme of the Union government.”

"The recovery of MSMEs is proceeding apace, as is evident in the amounts of Goods and Services Tax (GST) they pay, while the Emergency Credit Linked Guarantee Scheme is casing their debt servicing concerns," it added.

In FY21, the government announced the Emergency Credit Linked Guarantee Scheme, which succeeded in shielding micro, small and medium enterprises from financial distress.

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