New Delhi [India], Aug 1 (ANI): The central government on Saturday changed the eligibility criteria of a scheme that provides government guaranteed loans to micro, small and medium enterprises (MSMEs) to enable other categories of borrowers also to take benefit of the same.

"Now businesses with annual turnover of up to Rs 2.5 billion can take loans under the scheme as against the earlier ceiling of Rs 1 billion," secretary in Department of Financial Services Debasis Panda said.

According to officials, the Emergency Credit Line Guarantee scheme will now also include individual loans given for business purposes.

The Finance Ministry also decided to increase the upper ceiling of loans to MSMEs from Rs 25 million to Rs 50 million. This will increase the amount of funding from Rs 5 crore to Rs 10 crore.

Under the scheme announced as part package to deal with economic fallout of COVID-19, the government has agreed to provide guarantee loans of small businesses up to 20 per cent of the outstanding term loans.

Loans under the scheme will also be extended to individual loans taken for business purposes, Panda said. The scheme had set a target of providing guarantee to loans worth Rs 3 trillions.

Till date Rs 1.36 trillion of loans have been sanctioned and disbursements of Rs 872.2 billion have taken place, he said.

Finance Minister Nirmala Sitharaman said that it is expected that with widened eligibility criteria around Rs 1 trillion worth of loans out of the total Rs 3 trillion would be taken by this category of borrowers.

She said all sectors of the economy are trying to come out of the impact of pandemic and no assessment of the road ahead can be made at this stage.

"We can't with any sense of certainty make an assessment of the economy. We at this stage are not in a position to come up with a complete picture," she said.

The Finance Minister said that the public sector enterprises policy that will lay down broad guidelines for privatisation too will go to the cabinet soon and even if the policy talks of reduction in number of state-run companies in a sector, that goal can be achieved through consolidation.

She said at the moment she has the goal of achieving sale of government stake in IDBI Bank.

Sitharaman said that the government will hold GST council meeting on the exclusive agenda of the Attorney General of India's opinion on borrowings for compensation.

Replying to a question, the DFS secretary said, "We have seen significant transmission of interest rate cut by public sector banks (PSBs). "Now bulk of PSBs are giving fresh home loans at around 6.65 per cent. There should be faster interest rate transmission from banks. Banks are now reviewing the interest rates within six months instead of two years," he said. (ANI)