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ECLGS Limit Hike To Help Airlines Navigate Global Headwinds: Assocham

Unlike other sectors, the civil aviation industry has not recovered from the impact of the Covid-19 pandemic and has been further stressed by inflation, the firm said in a statement

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India’s trade association and advocacy group, Assocham has said that the decision to enhance the maximum eligibility under the Emergency Credit Line Guarantee Scheme (ECLGS) to Rs 1,500 crore for the airlines will help them navigate global headwinds amid the growing concerns of a possible recession in major economies of the world.

Unlike other sectors, the civil aviation industry has not recovered from the impact of the Covid-19 pandemic and has been further stressed by inflation, the firm said in a statement.

“Given the volatility in the foreign exchange rates, high fuel prices and the recessionary fears in some of the key economies of the world, the aviation sector continues to remain under extreme pressure despite India doing exceedingly well in terms of reopening the economy after the Covid-19 induced lockdowns,” said Deepak Sood, Secretary General, Assocham

Earlier decision to extend the ECLGS to March 2023 along with the latest announcement for liberalisation of the same would go a long way to restore the financial stability of the airlines, said Sood.

The central government on Monday said that it has modified the ECLGS and raised the loan limit under the scheme to Rs 1,500 crore from Rs 400 crore to help the Covid-hit aviation sector tide over liquidity stress.

The Ministry of Finance in a statement said that all other criteria, terms and conditions parameters prescribed under the operational guidelines of the ECLGS on 30 August 2022 shall be applicable as it is.

"The modifications introduced are aimed to give necessary collateral-free liquidity at reasonable interest rates to tide over their present cash flow problems," it said. 

Earlier in March 2022, the ECLGS was extended beyond March 2022, till March 2023, to implement the announcement made in the union budget 2022-23 by Finance Minister Nirmala Sitharaman. 


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