On account of the disruptions caused by the second wave of COVID 19 pandemic to businesses across various sectors of the economy, the Government has further enlarged the scope of Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs and aviation. “The Civil Aviation sector to be eligible under ECLGS 3.0,” the release said.
Commenting on the development, Ankur Bhatia, Executive Director Bird Group, said: “The extension of Emergency Loan Credit Guarantee Scheme for aviation sector will ease the prolonged strain on employment-intensive sector. The move will bolster the much-needed liquidity to these sectors which employ a large number of people.
“It is appreciated that inspite the revenue constraints faced by the government and its impact on the widening fiscal deficit, the government has taken cognisance of the strain the aviation sector is going through.This will help the sector tide over the cash crunch and working capital issues.
“One of the key challenges faced by the stressed sectors is severe liquidity crunch in the wake of low demand and an ECLGS scheme could help provide interim liquidity support, till demand recovers.”
The modifications in ECLGS,would enhance the utility and impact of ECLGS by providing additional support to MSMEs, safeguarding livelihoods and helping in seamless resumption of business activity. These changes will further facilitate flow of institutional credit at reasonable terms.