The retail industry has sought clarity from the Finance Ministry on the Emergency Credit Line Guarantee Scheme (ECLGS) 3.0 and has urged the government to extend benefits to the sector under the scheme.
At the same time, the hospitality industry has urged the Centre to allow even hotels with no borrowings too to seek benefits under the scheme and utilise the credit line for any business purpose, including repayment of loans and interest payment.
Retailers Association of India in its submission to Finance Ministry, said while the sector was mentioned during the announcement of ECLGS 2.0, there is no clarity on whether the sector will be able to avail benefits in the notification which announced ECLGS 3.0. Kumar Rajagopalan, CEO, Retailers Association of India, said the industry has sought clarity from the government on this issue. “RAI has urged the government to make funds available for the sector under ECLGS.
Availability of additional funding facility to the eligible retail business will go a long way in contributing to retail revival, protecting jobs, and creating conducive environment for employment generation,” he added. The government recently extended the ₹3-lakh crore emergency credit line guarantee scheme by another three months till June 30 and widened its scope to new sectors, including hospitality, travel and tourism.
Waiting for recovery
The Hotel Association of India (HAI), in its submission to the Finance Ministry, said ECLGS 3.0 requires customisation for the sector. The hospitality industry body has said the sector is highly capital-intensive and has a high percentage of fixed costs of operations that have become unsustainable owing to nil or negligible revenues.
“The recovery of hotels will also be long drawn as borders will be reopened with caution and traveller confidence will return over time. The ECLGS 3.0 scheme for hotels, therefore, needs to factor in these aspects unique to the industry,” HAI said in its submission to the Ministry.
Inclusion of State Financial Corporations, Asset Reconstructions Companies (ARCs) and Debt Funds, extension of moratorium, capping of interest rate at 8 per cent, increasing of the delinquency period are some of the suggested customisations by HAI.