Emergency Credit Line Guarantee Scheme

The Union Cabinet has agreed to raise the cap on the Emergency Credit Line Guarantee Scheme (ECLGS).

About

• The cap has been raised from Rs. 4.5 billion to Rs. 5 billion.
• The additional funds are being set aside just for businesses in the hospitality industry and other associated industries through the scheme's expiration date of 31.03.2023.
• Due to the tremendous disruptions that the COVID-19 epidemic has produced for the hospitality industry and related businesses, there has been an upsurge.

Impact of limit enhancement:

• It will give businesses much-needed relief and aid the hospitality sector’s comeback.
• Providing additional, low-cost loans to lending institutions of up to Rs. 50,000 crore as an incentive.
• Allowing these commercial organisations to pay their operational obligations and carry on with their operations.

About Emergency Credit Line Guarantee Scheme (ECLGS)

• Objective:
• To assist enterprises, notably MSMEs, in meeting their operating liabilities and resuming operations in light of the distress brought on by the COVID-19 issue. Announced as part of the Atma Nirbhar Bharat Package in 2020.
• Supplying Member Lending Institutions (MLIs) with a complete guarantee against any losses incurred by them as a result of borrowers' failure to repay the ECLGS funds.
• Operational area of the Ministry of Finance's Department of Financial Services (DFS).

Limit:

• The overall cap for ECLGS was originally set at Rs 3 lakh crore but later increased to Rs 4.5 lakh crore.
• Up to 5.8.2022, loans totaling about Rs. 3.67 lakh crore have been approved under ECLGS.

5 years of the UDAN Government  Scheme

The Regional Connectivity Scheme UDAN (Ude Desh ka Aam Nagrik), the Ministry of Civil Aviation's flagship program, recently celebrated five successful years since the commencement of its inaugural flight in 2017.

About UDAN Scheme

• It is the Ministry of Civil Aviation's flagship Regional Connectivity Scheme (MoCA).
• By adhering to the Ude Desh ka Aam Nagrik goal and providing improved aviation infrastructure and air connectivity in tier II and III cities, it seeks to satisfy the aspirations of the average person.
• The UDAN Scheme seeks to establish air transportation links between small and medium cities and major cities.
• Regional aviation connectivity in the nation has considerably improved thanks to UDAN.
• In 2014, there were 74 active airports. As a result of the UDAN program, this number has already reached 141.

UDAN developed a framework in response to the demand, which resulted in the creation of:

• Lifeline UDAN (for transportation of medical cargo during a pandemic).
• Krishi UDAN (value realization of agricultural goods, particularly in the NER and tribal districts of the Northeast).
• To investigate international connectivity from and to Guwahati and Imphal, NER will use international UDAN routes.
• The Prime Minister's Award for Excellence in Public Administration in the Innovation Category for the 2020 calendar year was given to RCS-UDAN.

Objectives :                         

• The primary goal of the UDAN Scheme is to provide air service between small and medium cities and major cities.
• To make air travel accessible and inexpensive for everyone. The country's population will have access to inexpensive and reasonable air travel options.
• Through the expansion of job opportunities and the development of air transportation infrastructure across the country, it seeks to promote inclusive economic growth.
• Restoring existing airports and airstrips to ensure connection to the underserved sections of the nation.

Benefits of the UDAN Scheme

• The start of regular airline operations on the route will also act as a stimulant for regional trade and tourism.
• The country's level of living will rise thanks to this plan.
• Air travel will become widely available and affordable through this plan.
• Unserved areas have benefited both directly and indirectly from air connectivity in terms of their economic growth.

Challenges

Pandemic:

• Due to low demand, a staggering majority of 300 routes have been impacted.

Market-driven scheme:

• Since UDAN is a market-driven initiative, it is the responsibility of the government to make the routes significantly more profitable for airline carriers.

Low yields and high operating costs:

• The civil aviation ministry acknowledged to the parliamentary inquiry that the aviation business is a challenging ecosystem to operate in.
• Infrastructure upgrade delays, airport preparedness issues, a lack of proper right of way (including inadequate runway lengths at some RCS airports), and delays in obtaining required regulatory permits are all to blame for the implementation of UDAN's poor pace.

Lower demand:

• Low demand on the few awarded routes combined with unfavourable and unpredictable weather conditions causes irregular operations and has occasionally led to airline closures.
• The inability to find suitable aircraft, challenges with aircraft leasing, a longer lead time for delivery, tricky maintenance issues with small aircraft, and troublesome issues with importing replacement parts from outside are some other issues.

Suggestions

• Creating a competitive and profitable regional aviation ecosystem is essential to ensuring the orderly development of Indian aviation.
• The development of airports in these areas is crucial to making them operationally viable for 70- to 80-seater aircraft.
• Accessibility: The government must make sure that these airports are reachable from neighbouring catchment areas.
• Fuel tax reductions are necessary, as has long been demanded by the sector.
• Regarding routes that were cancelled or were not operationalized, the Civil Aviation Ministry announced a special round of UDAN 4.1.

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