Indicating a steady progress of the Rs 3 lakh crore collateral-free loans proposed for MSMEs in the recent Atma Nirbhar Bharat Package, commercial banks have sanctioned loans worth Rs 1.2 lakh crore under the scheme and about half of it has already been disbursed to businesses.
As far as the Rs 30,000 crore special liquidity scheme for NBFCs/HFCs, applications requesting about Rs 9,875 crore (33% of the scheme) of financing has been received, it was revealed in recent review by finance and corporate affairs minister Nirmala Sitharaman on the schemes of her ministries.
In May 12, Prime Minister Narendra Modi had announced the Rs 20 lakh crore package to give succour to businesses and people from the adverse effect of Covid-19. Later, details of the package were unveiled by Sitharaman during May 13-17. The package mainly consisted of easier liquidity facilities while fiscal cost was estimated to be only Rs 2 lakh crore (that rose later to Rs 3 lakh crore).
One of the key components of the package was to give Rs 3 lakh crore collateral-free automatic loans for businesses, including MSMEs. In a short period of about one and a half month, noticeable progress has been achieved in identifying units, sanctioning as well as disbursing of loans to MSMEs, the finance ministry said.
On the special liquidity scheme for NBFCs/HFCs, SBICAP (the manager of the scheme) has received 24 applications requesting about Rs 9,875 crore of financing as on July 7. The first application in this regard has received its approval and the remaining are also being considered, the ministry said.
A new front loaded special refinance facility of Rs 30,000 crore was sanctioned by Nabard during Covid-19 to RRBs & cooperative banks. This special facility benefits 3 crore farmers, consisting mostly of small and marginal farmers in meeting their credit needs for post-harvest and kharif sowing requirements. When kharif sowing is already in full swing, Rs 24,877 crore out of Rs 30,000 crore has been disbursed as on July 6, out of this special facility, the ministry said.
Existing Partial Credit Guarantee Scheme (PCGS) has been revamped and extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs). Banks have approved purchase of portfolio of Rs 14,000 crore and are currently in process of approval/negotiations for Rs 6,000 crore as on July 3. The Centre provides 20% first loss sovereign guarantee to public sector banks under the scheme.
One of the key announcements was to reserve government procurement tenders up to Rs 200 crore for domestic MSMEs. In a major relief to these small units, expenditure department has amended General Financial Rules (GFR), 2017 and GFR Rules relating to global tenders, to disallow government procurement tenders up to Rs 200 crore.
The government has also acted on its promise that all central agencies like railways, ministry of road transport and highways and CPWD will give extension of up to 6 months to contractors for completion of contractual obligations, including in respect of EPC and concession agreements. In this regard, expenditure department has issued instructions that on the invocation of Force Majeure Clause (FMC), contract period may be extended for a period not less than three months and not more than six months without imposition of any cost or penalty on the contractor/concessionaire.
Instructions were also issued to return the value of performance security to the contractor/ suppliers proportional to the supplies made/ contract work completed to the total contract value.