Government expands credit safety net for MSMEs, airlines to bolster growth amid global headwinds

New Delhi: In a proactive move to keep businesses resilient, the Union Cabinet on Tuesday approved the fifth edition of the Emergency Credit Line Guarantee Scheme, widening collateral-free credit support for micro, small and medium enterprises and key non-MSMEs, including airline companies.

The decision comes as India looks to shield its growth engines from the ripple effects of the West Asia crisis. ECLGS 5.0 will give eligible firms easier access to working capital through government-backed loans, helping them maintain operations, protect jobs, and meet order commitments.

Officials said the expanded coverage will benefit MSMEs that power India’s manufacturing and exports, while support for airlines will help keep connectivity and trade routes stable. The scheme has been a proven lifeline since 2020, enabling lakhs of units to navigate past disruptions.

By strengthening liquidity for small businesses and critical sectors now, the government aims to turn global uncertainty into an opportunity for stability and confidence at home. Detailed guidelines on loan limits and tenure under the new edition will be issued by the Finance Ministry shortly.