ReutersStory outline
- The report stated that growth in credit was driven by major economic sectors.
- The launch of the ECLGS in May 2020 and its expansions benefitted the credit growth to MSMEs.
- It helped push the credit to micro and small industries to 19.9% in February 2022 from 3.1% a year ago.
The Union Budget 2022-23 also extended the ECLGS to March 2023 and increased the guarantee cover by Rs 50,000 crore to a total cover of Rs 5 lakh crore.
As per the Monetary Policy Report released on Friday by the Reserve Bank of India, there has been a considerable growth in credit to industry which is also aided by the government’s Emergency Credit Line Guarantee Scheme (ECLGS) that was released in 2020 to help the MSMEs mitigate the effects of Covid-19.
The report stated that growth in credit was driven by major economic sectors. “Growth in credit to industry recovered to 6.5% in February 2022 from a low of 1.0% a year ago, aided by higher flows to MSMEs and a turnaround in large industry,” it read.
It added that within industry, the launch of the ECLGS in May 2020 and its subsequent expansions benefitted the credit growth to MSMEs. It helped push the credit to micro and small industries to 19.9% in February 2022 from 3.1% a year ago and to medium industries to 71.4% from 30.6% a year ago.
The Union Budget 2022-23 also extended the ECLGS to March 2023 and increased the guarantee cover by Rs 50,000 crore to a total cover of Rs 5 lakh crore.
“Credit to large industry emerged out of an extended period of contraction/slow growth and recorded 0.5% growth in February 2022, supported by key industries such as engineering; chemicals and chemical products; food processing; leather and leather products; and rubber, plastic, and their products,” the report read.
The report stated that growth in credit was driven by major economic sectors. “Growth in credit to industry recovered to 6.5% in February 2022 from a low of 1.0% a year ago, aided by higher flows to MSMEs and a turnaround in large industry,” it read.
It added that within industry, the launch of the ECLGS in May 2020 and its subsequent expansions benefitted the credit growth to MSMEs. It helped push the credit to micro and small industries to 19.9% in February 2022 from 3.1% a year ago and to medium industries to 71.4% from 30.6% a year ago.
The Union Budget 2022-23 also extended the ECLGS to March 2023 and increased the guarantee cover by Rs 50,000 crore to a total cover of Rs 5 lakh crore.
“Credit to large industry emerged out of an extended period of contraction/slow growth and recorded 0.5% growth in February 2022, supported by key industries such as engineering; chemicals and chemical products; food processing; leather and leather products; and rubber, plastic, and their products,” the report read.
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