With West Asia war adversely impacting the MSMEs and aviation sectors, the government on Tuesday announced the Emergency Credit Line Guarantee Scheme (ECLGS) with an outlay of Rs 18,000 crore.
Minister of Information and Broadcasting Ashwini Vaishnaw said the scheme will result in total credit flow of Rs 2.55 lakh crore including Rs 5,000 crore to aviation sector.
According to a cabinet note, MSMEs and non-MSMEs with existing working capital limits, as well as scheduled passenger airlines with outstanding credit facilities as of March 31, 2026, will be eligible under the scheme. The scheme will provide 100% credit guarantee cover for MSMEs and 90% for non-MSMEs and the airline sector. The government said there will be no guarantee fee, and additional credit of up to 20% of peak working capital utilised during Q4 FY26 (capped at Rs 100 crore) will be provided. For airlines, the additional credit will be up to 100% (capped at Rs 1,500 crore per borrower, subject to specified conditions).
In terms of tenure, loans will have a 5-year period from the date of first disbursement, including a moratorium of 1 year for MSMEs and non-MSMEs (excluding the airline sector). For the airline sector, the tenure will be 7 years, including a moratorium of 2 years. The minister said the scheme will apply to all loans sanctioned from the date of issuance of guidelines by the National Credit Guarantee Trustee Company Limited (NCGTC) up to March 31, 2027.
“The scheme aims to enable businesses to tide over the challenges arising from the West Asia conflict. Additionally, this is expected to help businesses maintain their operations, protect jobs, and sustain supply chains,” said the minister.
The ECLGS was launched in May 2020 to support MSMEs and other businesses facing economic distress caused by the Covid-19 pandemic. So far, the scheme has helped more than 1.1 crore MSMEs extending guarantees worth Rs 3.7 lakh crore.
Meanwhile, the government has approved two more semiconductor projects under the India Semiconductor Mission (ISM), including the country’s first commercial Mini/Micro-LED display facility based on GaN (Gallium Nitride) technology and a semiconductor packaging facility. The two newly approved proposals will set up semiconductor manufacturing facilities in Gujarat with a cumulative investment of around Rs 3,936 crore and are expected to generate employment for 2,230 skilled professionals.
With these approvals, the semiconductor ecosystem in the country is set to receive a significant boost, taking the total number of approved projects under the India Semiconductor Mission to 12, with cumulative investments of around Rs 1.64 lakh crore. Of these, two have already started production, with Micron Technology commencing operations on February 28 and Kaynes Technology on March 31, 2026.
Hyderabad-based Crystal Matrix Limited (CML) has been approved to set up an integrated facility for compound semiconductor fabrication (GaN foundry) and ATMP (Assembly, Testing, Marking, and Packaging) in Dholera, Gujarat.
Another project approved is Suchi Semicon Private Limited (SSPL), which will set up an Outsourced Semiconductor Assembly and Test (OSAT) facility in Surat, Gujarat, for manufacturing discrete semiconductors.
