Government’s Emergency Credit Line Guarantee Scheme (ECLGS) targets additional credit flow of Rs. 2,55,000 crore to Support Stability, Resilience, and Employment

New Delhi, May 6, 2026: The Government of India’s Emergency Credit Line Guarantee Scheme (ECLGS) to target industrial continuity, preserving employment, and strengthening liquidity access for businesses, particularly Micro, Small and Medium Enterprises (MSMEs), during periods of economic uncertainty is a proactive step in the right direction said Rajeev Juneja, President, PHDCCI.
The scheme provides government-backed credit guarantees to banks and financial institutions, enabling faster and collateral-free emergency lending to eligible businesses, he added.
ECLGS is designed to address temporary liquidity shortages faced by industries during periods of economic stress by reducing lending risk for financial institutions through sovereign-backed guarantees to enable continued credit flow to viable businesses across manufacturing, services, trade, logistics, healthcare, hospitality, aviation, and among others.
Under the scheme, eligible firms are able to access additional working capital support without the requirement of fresh collateral which will help industries meet operational expenses, maintain production cycles, pay suppliers, and retain employees, he added
The availability of guaranteed emergency credit will help MSMEs:
•    Maintain working capital operations
•    Continue wage payments
•    Procure raw materials
•    Prevent supply-chain disruptions
•    Avoid insolvency and business closures
"Further, the scheme will play an important role in stabilizing industrial supply chains and protecting employment. By ensuring continuity of credit production stoppages are reduced, vendor payment cycles are maintained and large-scale layoffs were mitigated", added Juneja
The government guarantee mechanism supports financial-sector stability by encouraging banks and non-banking financial institutions to continue lending during uncertain economic environment. The scheme continues to be regarded as one of India’s largest emergency credit-support interventions aimed at safeguarding industrial activity, MSME resilience, and employment continuity said Dr. Ranjeet Mehta, SG & CEO, PHDCCI.