Cabinet Likely To Consider Rs 2.5 Lakh Crore MSME Credit Guarantee Scheme

ENA MSME 2026-05-05 15:43:34 New Delhi, May 5 (KNN) The Union Cabinet is likely to consider a Rs 2.5 lakh crore Credit Line Guarantee Scheme (CLGS) aimed at supporting micro, small and medium enterprises (MSMEs) and providing targeted relief to the aviation sector. The scheme is set to provide support to businesses hit by trade disruptions stemming from the ongoing conflict in West Asia and Middle East. The proposal, being finalised by the Department of Financial Services (DFS) under the Ministry of Finance seeks to expand the governments credit guarantee framework by enabling lenders to extend collateral-free or partially guaranteed loans to viable but stressed firms, as per a report by NDTV. A dedicated Rs 5,000 crore credit window for the aviation sector is also expected to be included in the scheme. This provision is intended to ease liquidity pressures on airlines grappling with higher jetfuel costs, longer flight routes, and increased insurance premiums linked to instability in West Asia. MSMEs, which form a critical component of Indias economic and employment landscape, are likely to be the primary beneficiaries of the proposed credit scheme. The scheme is expected to follow a structure similar to pandemic-era emergency credit programmes. This, it is howver expected to be more targeted. The proposed intervention comes against the backdrop of growing global uncertainties, elevated crude and commodity prices and logistics disruptions. Separately, the Cabinet is also expected to take up the Rs 48,862 crore Galathea Bay International Container Transshipment Port project in Great Nicobar Island. The project, which has received in-principle clearance from the Public Private Partnership Appraisal Committee (PPPAC), aims to position India as a key player in global maritime trade by reducing dependence on foreign transshipment hubs such as Colombo, Singapore, and Port Klang. The development is part of the governments broader strategy to stabilise key sectors and strengthen economic resilience amid evolving global challenges. (KNN Bureau) 46014 https://knnindia.co.in/news/newsdetails/msme/cabinet-likely-to-consider-rs-25-lakh-crore-msme-credit-guarantee-scheme 2026-05-05 15:43:34 knnindia.co.in Cabinet Likely To Consider Rs 2.5 Lakh Crore MSME Credit Guarantee Scheme