Govt Clears ECLGS 5.0; ₹5,000 Cr Relief for Airlines
Scheme aims to ease liquidity stress amid West Asia crisis and rising fuel costs
- Union Cabinet of India approves ECLGS 5.0
- ₹2.55 lakh crore additional credit support announced
- ₹5,000 crore earmarked for airline sector
- 7-year loan tenure with 2-year moratorium
GG News Bureau
New Delhi, 6th May: The Union Cabinet of India, chaired by Prime Minister Narendra Modi, has approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to provide targeted financial support to MSMEs and the aviation sector amid ongoing global disruptions.
The scheme comes in response to financial stress faced by airlines due to rising Aviation Turbine Fuel (ATF) prices, airspace restrictions and reduced international operations linked to the West Asia situation.
Under ECLGS 5.0, an additional ₹2.55 lakh crore credit flow has been enabled, with ₹5,000 crore specifically earmarked for airlines to address liquidity challenges.
The scheme offers 100% credit guarantee for MSMEs and 90% for non-MSMEs and airlines, backed by the National Credit Guarantee Trustee Company Limited (NCGTC), to support lending institutions.
For airlines, the scheme provides loans of up to ₹1,000 crore per borrower, with an additional ₹500 crore allowed subject to equivalent equity infusion. The loans will have a tenure of up to 7 years, including a 2-year moratorium, offering immediate relief on repayments.
The government said the scheme will help airlines manage operational disruptions, currency volatility and rising fuel costs, while maintaining connectivity and safeguarding employment.
Civil Aviation Minister Ram Mohan Naidu said the decision reflects timely government intervention to stabilise the aviation sector during uncertain global conditions.
He noted that the scheme would strengthen liquidity, support jobs and ensure continuity of operations, while also benefiting MSMEs linked to the aviation ecosystem.
The scheme will be applicable to loans sanctioned until March 31, 2027, and is expected to boost lender confidence through sovereign-backed guarantees.
Officials said the initiative will help sustain growth in India’s aviation sector and minimise cost pressures on passengers during the ongoing global turbulence.
