The Centre has decided to extend the Emergency Credit Line Guarantee Scheme till March next year, Union Finance Minister Nirmala Sitharaman said on Tuesday while presenting the Budget for 2022-23.

The allocation for the scheme aimed at providing credit to micro, small and medium-sized businesses, or MSMEs, will be expanded by Rs 50,000 crore to Rs 5 lakh crore, Sitharaman said.

The ECLGS was formulated as part of the Atmanirbhar Bharat initiative to mitigate economic stress caused by the coronavirus pandemic to micro, small and medium enterprises. The scheme was first announced in May 2020, during the first coronavirus lockdown.

Initially, government-guaranteed loans worth Rs 3 lakh crore in all were to be provided to enterprises under the scheme. On September 29, the Centre extended the timeline of the scheme till March 31, 2022, or till guarantees worth Rs 4.5 lakh crore were issued, whichever was earlier. This limit has now been increased to Rs 5 lakh crore.

In her speech on Tuesday, Sitharaman said that the ECLGS scheme has provided much-needed credit to more than 1.30 crore micro, small and medium enterprises. “This has helped to mitigate the adverse impact of the pandemic,” Sitharaman said in her speech.

Sitharaman on Tuesday also announced additional funds for the Credit Guarantee Trust for Micro and Small Enterprises to facilitate additional credit of Rs 2 lakh crore for micro and small enterprises.