New Delhi: The Centre has announced a major financial relief package to support businesses affected by the ongoing West Asia conflict, introducing the latest version of the Emergency Credit Line Guarantee Scheme. The initiative, known as ECLGS 5.0, comes with an outlay of Rs 18,100 crore and is designed to assist micro, small and medium enterprises as well as the aviation sector.
The scheme, approved by the Union Cabinet, is expected to enable additional credit flow of up to Rs 2.55 lakh crore, including a dedicated provision of Rs 5,000 crore for airlines. Addressing the announcement, Ashwini Vaishnaw said the initiative aims to reduce financial stress in key sectors impacted by global disruptions.
Under the scheme, passenger airlines will be eligible for credit support of up to 100 per cent of their peak credit requirement, capped at Rs 1,500 crore. Other eligible institutions can access up to 20 per cent of their working capital needs, subject to a limit of Rs 100 crore. The move is intended to ensure that businesses can continue operations despite liquidity challenges.
The government highlighted that the scheme will help maintain supply chains, safeguard employment, and support uninterrupted production. It also seeks to strengthen overall economic resilience by ensuring that businesses have access to timely financial assistance.
Credit guarantees under the programme will be provided through National Credit Guarantee Trustee Company Limited, offering full coverage for MSMEs and up to 90 per cent for other sectors, including airlines. This mechanism is expected to encourage banks and financial institutions to extend additional credit with reduced risk.
The repayment structure varies by sector, with airlines receiving a seven year tenure including a two year moratorium, while MSMEs and other borrowers will have a five year term with a one year moratorium.
Civil Aviation Minister K. Rammohan Naidu described the scheme as a crucial step to support airlines in managing short term financial pressures while ensuring continuity in services.
The scheme will remain in effect for loans sanctioned up to March 31, 2027, offering a critical cushion to sectors navigating ongoing global uncertainty.
