Consider the following statements: 1. Loan Guarantee Scheme for Covid affected sectors (LGSCAS) with a Corpus of Rs. 2,000 crore was launched in 2021 for providing credit guarantee coverage to lending institutes for loans to projects under health care sector. 2. The scheme provides credit guarantee of 50 percent to all greenfield projects and 75 percent to all brownfield projects to be set up at the centres other than metropolitan cities. 3. For aspirational districts, the guarantee cover will be 50 percent for both brownfield expansion & greenfield projects. 4. For aspirational districts the guarantee cover will be 75 percent for both brownfield expansion & greenfield projects. Which of the statements given above is/are correct?

Official answer key: C. The answer shown above (D) is the academy’s own.

Loan Guarantee Scheme for Covid affected sectors (LGSCAS)

• The Government of India has introduced a Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS) with a corpus of Rs. 2,000 crores for providing credit guarantee coverage to projects under the healthcare sector. Hence, Statement 1 is correct.
• It is aimed at boosting medical infrastructure in the country, specifically targeting underserved areas.
• It guarantees 50% for brownfield projects and 75% for greenfield projects for loans sanctioned up to Rs.100 crore, set up at urban or rural locations other than 8 Metropolitan Tier 1 cities (Class X cities). Hence, Statement 2 is not correct.
• For aspirational districts, the guarantee cover for both brownfield expansion and greenfield projects is 75%. Hence, Statement 3 is not correct and Statement 4 is correct.
• Guarantee duration is up to 3 years.
• It will help the country in shoring up its much-needed healthcare infrastructure along with creating more employment opportunities.
• The main objective of LGSCAS is to partially mitigate credit risk (primarily construction risk) and facilitate bank credit at lower rates of interest.