India expands guarantees on business loans to $60.7 billion

India has extended a federal guarantee on bank loans to health and tourism services to cushion them from the ravaging impact of the pandemic and also waived visa fees for 500,000 foreign tourists.

India’s finance minister said on Monday that the government, as part of its efforts to revive the pandemic-hit economy, would expand federal guarantees on loans to businesses to Rs4.5 trillion ($60.7 billion) from an earlier limit of Rs3.0 trillion rupees.

Finance Minister Nirmala Sitharaman said the government would provide a guarantee of Rs1.1 trillion on loans to the health sector and medical infrastructure to enable them to raise loans at a lower interest rate of 8-8.25 per cent a year.

The Emergency Credit Line Guarantee Scheme, launched last year, has helped cash-starved small businesses raise funds during the Covid-19 lockdown for working capital and to meet their orders.

The government will extend benefits from the free foodgrain programme for poor people, launched last year, till November that will cost Rs938.7 billion, bringing the total cost of the programme to more than Rs2.27 trillion, she said.

Sitharaman said that under the new loan guarantee scheme for Covid-affected sectors, working capital or personal loans will be provided to people in the tourism sector to discharge liabilities and restart businesses impacted due to Covid-19.

Loans will be provided to registered tourist guides and other travel and tourism stakeholders with 100 per cent guarantee. Loans of up to Rs1 trillion would be available with guarantee to tourist guides licenced at regional or state level. A total of 10,700 regional level tourist guides recognised by the Minister of Tourism and state governments would benefit from the scheme.

— issacjohn@khaleejtimes.com