The government is exploring an ECLGS-like credit guarantee mechanism to support micro, small and medium enterprises (MSMEs), even as the sector continues to show resilience amid global disruptions.
“We are in constant touch with the Department of Financial Services regarding ECLGS kind of a mechanism. So, at an appropriate stage I will be in a position to share further details on this,” Additional secretary in the MSME ministry Rajneesh said.
The proposed framework comes as the government steps up efforts to cushion MSMEs from supply-side disruptions and rising costs, while maintaining credit flow and liquidity support. The Emergency Credit Line Guarantee Scheme (ECLGS) was originally launched in May 2020 under the Aatmanirbhar Bharat Abhiyan to help MSMEs meet operational liabilities and restart businesses disrupted by the COVID-19 pandemic.
Small Businesses
Despite global headwinds, MSMEs have recorded strong growth. More than 20 lakh enterprises were registered on the Udyam portal during February–March 2026, taking the total number of registered units to over 8 crore, the official said, adding, “This is a sign of resilience of the MSMEs of India.”
Credit flow to the sector has remained robust, with outstanding credit crossing ₹36.7 lakh crore, and a 23.5% growth recorded in the January–March quarter.
In a key policy move, the Reserve Bank of India has doubled the collateral-free lending limit from ₹10 lakh to ₹20 lakh for micro and small enterprises, effective April 1, 2026.
The official said the government has also extended strong institutional backing, with over 5.27 lakh credit guarantees worth more than ₹92,000 crore approved during February–March.
Liquidity measures have gained traction through digital platforms, with the Trade Receivables Discounting System (TReDS) seeing invoice discounting volumes rise from ₹4,300 crore in 2022 to over ₹7 lakh crore currently, including about ₹85,000 crore in the last two months.
Digital Traction
The ministry has also stepped up raw material support, supplying over one lakh metric tonne in the last three months, with a 12.5% year-on-year increase in March.
Meanwhile, the government has ensured continuity in energy supply to support industrial activity, particularly for MSMEs and critical sectors such as pharmaceuticals.
“The Government of India ensured uninterrupted domestic availability through timely measures. Domestic PNG and LPG consumers were given top priority, maintaining 100% supply continuity,” said Sujata Sharma, joint secretary, petroleum ministry.
Commercial LPG supply has been restored to 70%, with priority extended to sectors including pharma, steel and automobiles. To support the pharma and chemical industries, the government has earmarked 1,000 metric tonne per day from the LPG pool, based on sectoral demand.
Since March 14, a total of 1,34,226 metric tonne of commercial LPG—equivalent to over 70.64 lakh 19-kg cylinders—has been supplied, including more than 8,000 MT of auto LPG.