UPSC Prelims Practice Questions — Cabinet approves Emergency Credit Line Guarantee Scheme 5.0

Question 1

Under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 approved by the Union Cabinet in May 2026, how many crore rupees have been specifically earmarked for the airline sector out of the total targeted additional credit flow?

Accepted Answer

Rs 5,000 crore

Answer

Rs 1,500 crore

Answer

Rs 50,000 crore

Answer

Rs 2,55,000 crore

Question 2

With reference to the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 vis-à-vis its earlier editions, consider the following statements:
1. Under ECLGS 5.0, MSMEs are eligible for 100% guarantee cover, while non-MSMEs and airlines are eligible for 90% guarantee cover.
2. The loan tenure for the airline sector is 7 years including a 2-year moratorium, longer than the 5-year tenure with 1-year moratorium available to MSMEs/non-MSMEs.
3. ECLGS 5.0 provides additional credit of up to 50% of the peak working capital utilised during Q4 FY 2025-26 for MSMEs and non-MSMEs (other than airlines).
Which of the statements given above is/are correct?

Accepted Answer

1 and 2 only

Answer

2 and 3 only

Answer

1 and 3 only

Answer

1, 2 and 3

Question 3

Which one of the following correctly describes the National Credit Guarantee Trustee Company (NCGTC), the implementing agency for the Emergency Credit Line Guarantee Scheme?

Accepted Answer

A wholly-owned company of the Department of Financial Services, Ministry of Finance, set up to act as a common trustee company for multiple credit guarantee trust funds.

Answer

A statutory body established under the Small Industries Development Bank of India Act to administer the Credit Guarantee Fund Trust for Micro and Small Enterprises.

Answer

A subsidiary of the Reserve Bank of India that extends deposit insurance and credit guarantee cover to scheduled commercial banks.

Answer

An autonomous institution under NITI Aayog responsible for refinancing MSME loans routed through scheduled commercial banks.

Question 4

The Emergency Credit Line Guarantee Scheme (ECLGS) was originally launched in May 2020 as a component of which one of the following Government of India initiatives?

Accepted Answer

Aatmanirbhar Bharat Abhiyan

Answer

Pradhan Mantri Garib Kalyan Package

Answer

Pradhan Mantri Mudra Yojana

Answer

Stand-Up India Scheme

Question 5

The Emergency Credit Line Guarantee Scheme (ECLGS) is operationalised through Member Lending Institutions by which of the following entities as the trustee providing the guarantee cover?

Accepted Answer

National Credit Guarantee Trustee Company Limited (NCGTC)

Answer

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Answer

Small Industries Development Bank of India (SIDBI)

Answer

Micro Units Development and Refinance Agency Limited (MUDRA)

Question 6

How many stressed sectors identified by the K. V. Kamath Committee were brought under the ambit of ECLGS 2.0 (over and above the healthcare sector)?

Accepted Answer

26

Answer

22

Answer

24

Answer

28

Question 7

The Udyam Registration Portal, through which enterprises obtain MSME status under the revised classification effective from 1 April 2025, is operated by which one of the following?

Accepted Answer

Ministry of Micro, Small and Medium Enterprises

Answer

Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry

Answer

Department of Financial Services, Ministry of Finance

Answer

Small Industries Development Bank of India (SIDBI)

Question 8

With reference to the revised classification of Micro, Small and Medium Enterprises (effective from 1 April 2025), the term "composite criteria" refers to which one of the following?

Accepted Answer

An enterprise must satisfy both the investment ceiling and the turnover ceiling of a category; if it exceeds either ceiling it is placed in the next higher category, and it is shifted to a lower category only if it falls below both ceilings.

Answer

An enterprise is classified on the basis of investment in plant and machinery or equipment alone, with turnover used only for export incentives.

Answer

An enterprise is classified separately as a manufacturing or service enterprise, with different turnover limits prescribed for each.

Answer

An enterprise is classified on the basis of a weighted average of investment, turnover and number of employees, with employment given one-third weight.

Question 9

Which one of the following was the earliest credit guarantee trust established by the Government of India to facilitate collateral-free credit to the Micro and Small Enterprises sector?

Accepted Answer

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Answer

National Credit Guarantee Trustee Company Limited (NCGTC)

Answer

Credit Guarantee Fund for Micro Units (CGFMU)

Answer

Credit Guarantee Scheme for Startups (CGSS)

Question 10

Under which one of the following is the National Credit Guarantee Trustee Company Limited (NCGTC), the trustee body for schemes such as ECLGS, CGFMU and the Credit Guarantee Fund for Stand-Up India, administratively placed?

Accepted Answer

Department of Financial Services, Ministry of Finance

Answer

Ministry of Micro, Small and Medium Enterprises

Answer

Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry

Answer

Department of Economic Affairs, Ministry of Finance

Question 11

The airline-specific window under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 was justified primarily on account of volatility in which single operating cost head of Indian scheduled carriers — typically the largest component of their operating expenditure?

Accepted Answer

Aviation Turbine Fuel (ATF)

Answer

Aircraft and engine lease rentals

Answer

Employee remuneration and benefits

Answer

Maintenance, Repair and Overhaul (MRO) services

Question 12

The credit guarantees under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, including the airline window, are extended to Member Lending Institutions by the National Credit Guarantee Trustee Company Limited (NCGTC), which is a wholly-owned company of which one of the following?

Accepted Answer

Department of Financial Services, Ministry of Finance

Answer

Reserve Bank of India

Answer

Small Industries Development Bank of India (SIDBI)

Answer

Ministry of Micro, Small and Medium Enterprises

Question 13

With reference to the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, consider the following financial entities:
1. Scheduled Commercial Banks
2. Non-Banking Financial Companies registered with the Reserve Bank of India
3. Small Finance Banks
4. Stock exchanges recognised by the Securities and Exchange Board of India
Which of the above are correctly identified as eligible Member Lending Institutions (MLIs) under the scheme?

Accepted Answer

1, 2 and 3 only

Answer

1 and 2 only

Answer

2, 3 and 4 only

Answer

1, 2, 3 and 4

Question 14

With reference to the guarantee mechanism under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, consider the following statements:
1. The guarantee cover extended to Member Lending Institutions for MSME borrowers is 100%.
2. The National Credit Guarantee Trustee Company (NCGTC) does not charge any guarantee fee from Member Lending Institutions under the scheme.
3. NCGTC is a wholly-owned company of the Department of Financial Services, Ministry of Finance.
4. Member Lending Institutions are required to obtain fresh collateral and a personal guarantee from MSME borrowers as a pre-condition for credit facilities under the scheme.
Which of the statements given above is/are NOT correct?

Accepted Answer

4 only

Answer

1 and 3 only

Answer

2 only

Answer

3 and 4 only

UPSC Prelims Practice Questions — Cabinet approves Emergency Credit Line Guarantee Scheme 5.0

Q1. Under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 approved by the Union Cabinet in May 2026, how many crore rupees have been specifically earmarked for the airline sector out of the total targeted additional credit flow?

Q3. Which one of the following correctly describes the National Credit Guarantee Trustee Company (NCGTC), the implementing agency for the Emergency Credit Line Guarantee Scheme?

Q4. The Emergency Credit Line Guarantee Scheme (ECLGS) was originally launched in May 2020 as a component of which one of the following Government of India initiatives?

Q5. The Emergency Credit Line Guarantee Scheme (ECLGS) is operationalised through Member Lending Institutions by which of the following entities as the trustee providing the guarantee cover?

Q6. How many stressed sectors identified by the K. V. Kamath Committee were brought under the ambit of ECLGS 2.0 (over and above the healthcare sector)?

Q7. The Udyam Registration Portal, through which enterprises obtain MSME status under the revised classification effective from 1 April 2025, is operated by which one of the following?

Q8. With reference to the revised classification of Micro, Small and Medium Enterprises (effective from 1 April 2025), the term "composite criteria" refers to which one of the following?

Q9. Which one of the following was the earliest credit guarantee trust established by the Government of India to facilitate collateral-free credit to the Micro and Small Enterprises sector?

Q10. Under which one of the following is the National Credit Guarantee Trustee Company Limited (NCGTC), the trustee body for schemes such as ECLGS, CGFMU and the Credit Guarantee Fund for Stand-Up India, administratively placed?

Q11. The airline-specific window under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 was justified primarily on account of volatility in which single operating cost head of Indian scheduled carriers — typically the largest component of their operating expenditure?

Q12. The credit guarantees under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, including the airline window, are extended to Member Lending Institutions by the National Credit Guarantee Trustee Company Limited (NCGTC), which is a wholly-owned company of which one of the following?