Centre Announces Rs 18,100-Crore ECLGS 5.0 for Airlines and MSMEs Hit by West Asia Conflict

The government stated the scheme aims to provide timely liquidity to tide over challenges, sustain businesses, prevent job losses, promote uninterrupted domestic production, and maintain ecosystem resilience.

Civil Aviation Minister K. Rammohan Naidu described the ECLGS as an imperative initiative, especially for the aviation sector, to navigate short-term liquidity challenges and maintain operations.

The scheme will be applicable to all loans sanctioned during the period from the date of issue of these guidelines by NCGTC up to March 31, 2027.

Airlines have a seven-year tenor from the date of first disbursement with a two-year moratorium; MSMEs and non-MSMEs have a five-year tenor with a one-year moratorium.

The scheme provides 100 per cent credit guarantee coverage for MSMEs and 90 per cent coverage for non-MSMEs as well as the airline sector to Member Lending Institutions (MLIs) by the National Credit Guarantee Trustee Company Limited (NCGTC) for the amount in default under the facility.

Information and Broadcasting Minister Ashwini Vaishnaw briefed reporters that ECLGS 5.0 aims to address stress in MSME and airline sectors caused by the West Asia crisis.

The Union Cabinet approved ECLGS 5.0 with an outlay of Rs 18,100 crore to provide relief for MSMEs and airlines affected by the West Asia crisis. The scheme is expected to enable an additional credit flow of Rs 2.55 lakh crore, including Rs 5,000 crore for airlines.

MSMEs and airlines have been facing substantial financial headwinds due to the West Asia conflict that started in February.