Over ₹1 Lakh Crore ECLGS Support Disbursed To Businesses Facing Liquidity Concerns: Govt

India’s micro, small, and medium enterprises (MSMEs) have demonstrated strong resilience during the recent West Asia crisis, with the government asserting that the sector’s “bad days are gone,” according to MSME Secretary Bharat Khera. He credited policy support and financial measures for helping the sector withstand external shocks.

Khera said the Centre has disbursed around ₹1 lakh crore under the Emergency Credit Line Guarantee Scheme 5.0 (ECLGS 5.0) to support businesses facing liquidity constraints, particularly MSMEs.

The objective of the scheme is to ensure that small businesses do not face undue financial stress during periods of global uncertainty.

“Our effort has been to ensure that MSMEs don’t suffer unduly in such times,” Khera said, highlighting the government’s continued focus on maintaining credit flow to the sector.

The ECLGS 5.0 scheme, approved by the Cabinet on May 5, was introduced to support businesses affected by short-term liquidity disruptions linked to the Iran conflict.

The programme aims to facilitate additional credit of up to ₹2.55 lakh crore, including ₹5,000 crore specifically allocated for the airline sector.

Under the scheme, the government provides a 100% credit guarantee for MSME loans and a 90% guarantee for non-MSME borrowers, including airlines.

These guarantees are extended through the National Credit Guarantee Trustee Company Ltd (NCGTC), enabling banks and financial institutions to lend more confidently to affected sectors.

The loans under the scheme come with a tenure of five years, including a one-year moratorium period.

Khera noted that the West Asia crisis also pushed Indian businesses to explore new export markets.

He said that geopolitical shifts are continuous and require adaptability from industries. With India entering multiple free trade agreements (FTAs), MSMEs are expected to benefit significantly.

“The new FTAs bring enormous opportunities for MSMEs. Many markets which were earlier closed are now open for the industry,” he said.

He further added that the MSME ministry will soon hold consultations with export promotion councils, industry representatives, and financial institutions to develop a more structured and viable export financing model to support future growth and global expansion of the sector.

Published on: Tuesday, June 30, 2026, 06:03 PM IST