The Centre is preparing to roll out a relief package aimed at sectors most affected by the ongoing Iran war, which has disrupted traffic through the Strait of Hormuz and hit India’s exports and imports.
According to government sources, this package will be part of a broader ₹2.5 lakh Crores Emergency Credit Line Guarantee Scheme (ECLGS) framework, designed to support multiple impacted industries.
A key component under consideration is an airline credit scheme worth ₹5,000 Crores. Airlines may be granted access to Centre-backed credit lines through the ECLGS route, with a provision of up to ₹1,000 Crores credit cap per airline.
The scheme is expected to run for five years, with the possibility of extension depending on the evolving situation. This targeted airline relief package would form part of the wider crisis support framework being developed.
The government is also considering offering up to 90 per cent credit guarantee cover to ease financial stress on affected companies. This follows earlier measures in March when the Central Board of Indirect Taxes and Customs (CBIC) extended relief to exporters in response to the Middle East crisis.
The ECLGS itself was first launched in May 2020 by the Union Finance Ministry to mitigate the economic impact of the Covid-19 pandemic. It was designed to provide collateral-free, government-backed loans with extended tenures and capped interest rates, ensuring quick access to funds without additional security or guarantee fees.
The current expansion of the scheme reflects its adaptability in addressing new crises, such as the disruption caused by the Iran war.
Agencies
