Govt extends ECLGS to aviation sector
Mumbai The government on Sunday announced extending the Emergency Credit Line Guarantee Scheme to the civil aviation sector, a move that is expected to provide a liquidity solace for the pandemic-hit segment.
Industry players said the timely decision to include the aviation sector under the Emergency Credit Line Guarantee Scheme (ECLGS), which was announced in May last year, will ease the pressure and provide the much-needed liquidity. The civil aviation sector has been facing strong headwinds due to the coronavirus pandemic and looking at possible help from the government.
Recently, the civil aviation ministry allowed the domestic airlines to reduce the capacity to 50 per cent from June 1 in the wake of the second wave of the pandemic. Air travel demand has been impacted due to the lockdowns and strict restrictions by various state governments to deal with the pandemic. Last month, domestic airline companies had reportedly sought reduction in capacity besides financial assistance to tide over the cash burn amid the nose-diving demand.
In a statement, the finance ministry on Sunday said that on account of the disruptions caused by the second Covid-19 wave to businesses across various sectors of the economy, it has been decided to enlarge the scope of ECLGS. The civil aviation sector to be eligible under ECLGS 3.0, it added. In March, ECLGS 3.0 was introduced to cover business enterprises in hospitality, travel and tourism, leisure and sporting sectors.