Water Alliance India, Ion Exchange Limited, Swach Environment Private Limited, Nangloi Water Services Private Limited, industry associations and other companies dealing with water management services have appealed to the Government of India to include water and waste water sectors in Emergency Credit Guarantee Limit Scheme (ECLGS 2.0) in order to seek financial support from lending institutions.
The water sector in India is under severe financial stress due to the Covid -19 pandemic with various drinking water and sanitation projects suffering immensely on account of restrictions imposed on activities, lack of manpower, credit crunch and shortage of raw material. With no financial support in the face of cautious lending by financial institutions, a failure to define the water and waste water projects under any of the pre-defined sub-sectors of infrastructure or construction in the ECLGS will spell doom for the viability of projects which are battling enormous financial distress.
Commenting on the issue, Sourav Daspatnaik, Managing Trustee, Water Alliance India said: “It is a matter of great concern that water, waste water and sanitation sectors which have been at the forefront of the Covid-19 crisis are not considered in the eligible sectors. Just like power and electricity, water, waste water management and sanitation must be considered as an essential service and cannot be subservient to other sectors. The life line of water infrastructure development in India will tumble if such reliefs under the Government policies are not made available to water, waste water and sanitation sector.”
The Government of India in response to the crisis caused by the COVID-19 pandemic, announced an Emergency Credit Line Guarantee Scheme (ECLGS). Under the scheme, the Government undertook to guarantee additional facilities provided by lending institutions to their existing borrowers. The same was further revised as ECLGS 2.0 wherein the Government guaranteed additional lending to the 27 sectors including the 26 sectors defined by the committee headed by KV Kamath and the health sector. Later, hospitality, travel & tourism, leisure and sporting sectors were included in the list of eligible sectors.
However, the water infrastructure players have not been able to avail this scheme in the absence of water sector being listed in the 26 sectors defined by the KV Kamath Committee. The loans under ECLGS can be sanctioned only up to 30.09.2021 and disbursed up to 31st of December 2021.
Ajay Popat, President, Ion Exchange said, “The Covid-19 pandemic and consequential lockdowns have impacted many drinking water and waste water management projects of the Central and the State Governments. Many participants in the water sector are MSMEs. The very idea of introducing Emergency Credit Line Guarantee Scheme (ECLGS) was to help those sectors which have been impacted due to the Covid-19 pandemic. It is unfortunate that drinking water and waste water management sectors have not been considered to avail the benefits of ECLGS and as a result multiple projects and MSMEs involved in the sector have been affected financially, apart from being crippled with lack of manpower, severe hike in raw materials like steel, cement and electrical among others”
“He further said, “Since most of these contracts have fixed prices, the cascading effect of all have resulted in acute credit crunch and financial distress. Thus, it is high time that the appropriate authorities revisit the list of beneficiaries of ECLGS and include drinking water and waste water management sectors into it or the viability of many MSME projects will be in question.”