India clears $1.9 billion loan guarantee plan as Iran war hurts firms, airlines
The scheme offers 100% guarantee cover for MSMEs and up to 90% for non-MSMEs and airlines, with Rs 2.55 lakh crore in additional credit targeted.
- On Tuesday, the Union Cabinet approved the Emergency Credit Line Guarantee Scheme 5.0, targeting Rs 2.55 lakh crore in additional credit flow, including Rs 5,000 crore for airlines, to address industry distress amid the West Asia conflict.
- Modeled after schemes launched during the Covid-19 pandemic supporting the Aatmanirbhar Bharat Abhiyaan, the latest version carries an estimated outlay of Rs 18,000 crore for government credit guarantees.
- The ECLGS 5.0 provides 100% guarantee coverage for MSMEs and 90% for non-MSMEs and airlines, with bank interest rates capped at 9% and NBFCs limited to 13% or 0.75% above benchmark rate.
- Loans for MSMEs feature a 5-year tenor with a 1-year moratorium, while airlines receive 7 years with 2-year moratorium; "by providing timely liquidity, the scheme will sustain the businesses and prevent job losses," the Cabinet noted.
- Eligible borrowers with standard accounts as of March 31, 2026, can access funds until March 31, 2027, building on prior schemes that supported about 1.1 crore MSMEs with Rs 3.7 lakh crore extended.
27 Articles
27 Articles
Cabinet approves Emergency Credit Line Guarantee Scheme for airlines amid West Asia crisis
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to provide targeted financial support to Indian airlines grappling with rising operational costs and disruptions linked to the West Asia situation. Out of the additional credit flow of Rs. 2,55,000 crore under the scheme, Rs. 5,000 crore has been earmarked for the aviation sector. The move comes amid mounting financial stre…
Govt clears Rs 5,000 crore emergency credit scheme for airlines amid jet fuel price surge
In view of the West Asia situation, the government has announced a clearing of Rs 5,000 crore emergency credit line scheme to airlines amid the jet fuel price surge, the Ministry of Civil Aviation said in a statement on Wednesday. Notably, the Iran war has led to a sharp hike in operating costs along with a decrease in passenger numbers. The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved the Emergency Credit Line Gu…
Cabinet clears ₹5,000-crore emergency credit package for passenger airlines
The government has cleared a ₹5,000-crore relief package for Indian passenger airlines hit by rising jet fuel costs and geopolitical disruptions. Eligible airlines can secure up to ₹1,500 crore in credit, benefiting from a seven-year repayment plan with a two-year moratorium.
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