Budget 2022: Government extends ECLGS till March 2023 with addition Rs 50,000 cr allocation; tourism and travel stocks jump | Lemon Tree, Oriental Hotels stocks in focus

The government has extended the ECLGS (Emergency Credit Line Guarantee Scheme) till March 2023 by increasing the cover by Rs 50,000 crores, the travel and tourism stocks cheered and surged up to 5 per cent amid the announcement made by finance minister Nirmala Sitharaman in Budget FY23. 

In her Budget 2022 speech, Sitharaman said, “The hospitality and related services especially for MSMEs (Micro-Small Medium Enterprises) are yet to regain pre-pandemic level. Considering these aspects, the ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore.” 

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ECLGs has provided the much-needed additional support to more than 130 lakh MSMEs helping them mitigate the worst effects of pandemic since its launch, and it was announced to help MSMEs cope up with pandemic losses and was extended up to March 31, 2022, earlier. 

On the back of these announcement, majority of the tourism and travel related stocks surged, in which Easy Trip Planners, Lemon Tree Hotels, Oriental Hotels, Aruna Hotels, Indian Hotels, EIH Associated Hotels surged between 1-5 per cent on the exchanges on Tuesday. 

Travel and tourism-related services, particularly those offered by micro and small businesses, have not yet recovered to pre-pandemic levels, CapitalVia Global Research said in its comment. 

The extension of ECLGS scheme may help the businesses regain traction, and certain government provisions may be able to assist it return to pre-COVID-19 levels sooner, it added. 

The extension of ECLGS to March 2023 and increase in guarantee to Rs 5 lakh crore is quite encouraging and will help them further in combating the impact of pandemic, Mohit Ralhan, Managing Partner of TIW Capital Group said in his comment.