Union Cabinet clears Rs 2.55 lakh-cr lifeline for MSMEs, airlines hit by West Asia war
The Union Cabinet approved the Emergency Credit Line Guarantee Scheme 5.0 (ECLGS 5.0) to provide credit support of Rs 2.55 lakh crore to industries, particularly MSMEs and airlines, facing distress due to the West Asia conflict. This scheme, modeled on previous Covid-era lifelines, includes Rs 5,000 crore specifically for airlines. With an estimated outlay of Rs 18,000 crore, it aims to ensure additional credit flow, offering 100% guarantee coverage for MSMEs and 90% for non-MSMEs by the National Credit Guarantee Trustee Company Limited (NCGTC). The initiative seeks to maintain operations, protect jobs, and sustain supply chains amidst global uncertainties.
Key Points
- The Union Cabinet approved ECLGS 5.0 to provide Rs 2.55 lakh crore in credit support, including Rs 5,000 crore for airlines.
- The scheme targets MSMEs and other industries affected by the West Asia conflict, mirroring Covid-era relief measures.
- ECLGS 5.0 offers 100% credit guarantee coverage for MSMEs and 90% for non-MSMEs through NCGTC.
- Additional credit for MSMEs and non-MSMEs (excluding aviation) is up to 20% of peak working capital utilized during Q4 FY26, capped at Rs 100 crore.
- For airlines, credit is up to 100% of peak working capital, capped at Rs 1,500 crore, with guarantee fees waived.
Exam Facts
- Scheme Name: Emergency Credit Line Guarantee Scheme 5.0 (ECLGS 5.0)
- Total Credit Flow: Rs 2.55 lakh crore
- Outlay: Rs 18,000 crore
- Guarantee provided by: National Credit Guarantee Trustee Company Limited (NCGTC)
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