Big relief to ECLGS and Airlines, Government launches Emergency Credit Line Guarantee Scheme

Liquidity: The Central Government approved the Emergency Credit Line Guarantee Scheme (ECLGS) with a provision of Rs 18,100 crore to micro, small and medium enterprises i.e. MSMEs, airlines and other companies to meet the challenges arising out of the West Asia conflict. The main objective of this scheme is to meet the working capital needs of the affected areas. This scheme, approved in the Union Cabinet meeting, is expected to ensure additional credit flow of up to Rs 2.55 lakh crore.

Government initiative to reduce pressure
Information and Broadcasting Minister Ashwini Vaishnav, while giving information about the cabinet decisions, said that this scheme has been brought to reduce the pressure on MSME and airline sector due to West Asia conflict. The government’s official statement said the proposed credit guarantee scheme will help businesses continue operations, protect employment, maintain supply chains and ensure uninterrupted domestic production. Providing timely liquidity will not only prevent loss of jobs, but will also maintain the strength of the entire economic system.

Will help in overcoming the challenges arising from the West Asia crisis
The official statement issued by the government said that the objective of this scheme is to help businesses overcome the challenges posed by the West Asia crisis. According to the statement, the scheme will help businesses continue their operations, protect employment and maintain supply chains. The proposed Credit Guarantee Scheme is an important step to meet the additional working capital needs of various industries including MSMEs and the airline sector.

Will help prevent loss of jobs
The government says that by providing timely liquidity, this scheme will help in keeping businesses stable and preventing job losses. Apart from this, it will also help in maintaining the uninterrupted continuity of domestic production and maintaining the strength of the entire economic system. It is noteworthy that due to the West Asia conflict that started in February, MSMEs and airlines sector are facing huge financial pressure.