Credit guarantee scheme worth ₹2.5L crore will support these sectors
28 Apr 2026
The Indian government is working on a massive ₹2.5 lakh crore credit guarantee scheme to support sectors like aviation and micro, small, and medium enterprises (MSMEs).
The proposal has been approved by the Finance Ministry's Expenditure Finance Committee (EFC) after inter-ministerial consultations.
It aims to provide relief to businesses facing liquidity stress due to geopolitical disruptions such as the ongoing West Asian crisis.
Scheme likely to be modeled on ECLGS
Implementation strategy
The proposed scheme is likely to be modeled on the Emergency Credit Line Guarantee Scheme (ECLGS), which was launched in 2020 for MSMEs during the COVID-19 pandemic.
It will act as a government-backed credit support framework, similar to previous interventions during economic stress periods.
The scheme's final rollout timeline is subject to Cabinet approval.
Preventing stress from leading to defaults
Reasons
The government plans to use the ₹2.5 lakh crore scheme to alleviate financial strain from supply disruptions and rising input costs. The move is aimed at preventing stress from leading to defaults, while ensuring continued credit flow to vulnerable sectors.
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