The Union Cabinet has approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to provide targeted financial support to airlines and businesses facing liquidity stress amid rising ATF prices, airspace disruptions and the ongoing West Asia situation.

Under the scheme, Rs 5,000 crore has been specifically earmarked for the aviation sector. Airlines will be eligible for loans of up to Rs 1,000 crore per borrower, with an additional ?500 crore allowed subject to equivalent equity infusion. The loans will carry a tenure of up to seven years, including a two-year moratorium period.

The scheme also provides 100% guarantee coverage for MSMEs and 90% coverage for non-MSMEs and airlines through the National Credit Guarantee Trustee Company Limited (NCGTC).

The government said the initiative is aimed at easing liquidity pressures, supporting uninterrupted airline operations, safeguarding jobs and improving credit flow to the aviation sector during the current global uncertainties.