Our Bureau
New Delhi
The Indian government has announced a big relief package for airlines and small businesses hit hard by the West Asia conflict involving US, Israel and Iran. The Union Cabinet approved the Emergency Credit Line Guarantee Scheme (ECLGS 5.0) with an outlay of Rs 18,100 crore on Tuesday.
Information and Broadcasting Minister Ashwini Vaishnaw said the scheme will help MSMEs and airlines facing stress from the war that started in February. It aims to provide extra credit flow of Rs 2.55 lakh crore, including Rs 5,000 crore for the airline sector.
Under the scheme, passenger airlines can get up to 100 per cent of peak credit, capped at Rs 1,500 crore per borrower. MSMEs and other firms can access up to 20 per cent of their peak working capital from Q4 FY26, capped at Rs 100 crore.
The government will give 100 per cent credit guarantee for MSMEs and 90 per cent for non-MSMEs and airlines. There is no guarantee fee. Loans for airlines have a seven-year tenure with two-year moratorium, while others get five years with one-year moratorium. The scheme runs till March 31, 2027.
Civil Aviation Minister K Rammohan Naidu called it a key step to protect jobs and keep flights running. “It will provide strong financial backing to safeguard jobs, sustain connectivity, and ensure resilience,” he posted on X.
The move comes as airlines like Air India cancelled thousands of flights due to closed airspace and doubled fuel costs. MSMEs face rising expenses and supply issues from the Iran war. Officials say this will prevent job losses and keep supply chains strong.
