Govt issues INR-9.1-bln guarantee to airline sector under ECLGS 5.0 by Jul 31
This story was originally published at 14:53 IST on 10 August 2026
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NEW DELHI – As of Jul. 31, the government issued credit guarantee worth INR 9.12 billion to the scheduled passenger airline sector under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, Minister of State for Finance Pankaj Chaudhary said in a written response to the Lok Sabha on Monday. The government had sourced a total of eight applications seeking credit worth INR 25.30 billion under the scheme by July-end. As of Jul. 31, four applications had been sanctioned with credit worth INR 9.20 billion, the minister said.
In May, the government had introducted the scheme to support any short-term liquidity mismatches faced by businesses due to the West Asia war. The scheme aims to facilitate continued access to institutional credit and support continuity of passenger airline operations.
For the scheduled passenger airline sector, the scheme allows additional credit of up to 100% of their total peak credit outstanding--both fund-based and non-fund-based--during the March quarter of 2025–26 (Apr-Mar). The scheme also provides 90% guarantee coverage to member lending institutions through National Credit Guarantee Trustee Co. Ltd. for the amount in default under the additional credit facility extended to eligible borrowers under scheduled passenger airline sector.
For credit support exceeding INR 1 billion, funds must be strictly directed toward essential operational expenses such as non-executive salaries, fuel purchases, airport charges, and aircraft lease payments, the minister said. For facilities exceeding INR 5 billion where earnings before income, tax, depreciation and amortisation is negative for the nine-month period in FY26, additional risk mitigation measures have been stipulated, he added. End
Reported by Shweta
Edited by Avishek Dutta
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