UPSC Prelims Practice Questions — ECLGS 5.0 Crosses 4.11 Lakh Guarantees with guaranteed amount reaching over ₹1.55 Lakh Crore
Q1. Under ECLGS 5.0, guarantees against defaulted additional credit are issued exclusively by which one of the following entities?
- A. National Credit Guarantee Trustee Company (NCGTC)
- B. Small Industries Development Bank of India (SIDBI)
- C. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
- D. Export Credit Guarantee Corporation of India (ECGC)
Q2. With reference to the milestone figures of ECLGS 5.0 reported in July 2026, consider the following statements:
1. The scheme has issued over 4.11 lakh guarantees.
2. The cumulative guaranteed amount has crossed ₹1.55 lakh crore.
3. About 98% of the guarantees, by number, have benefited MSMEs.
4. MSME additional loans are extended a guarantee coverage of 90%.
Which of the above is/are NOT correct?
- The scheme has issued over 4.11 lakh guarantees.
- The cumulative guaranteed amount has crossed ₹1.55 lakh crore.
- About 98% of the guarantees, by number, have benefited MSMEs.
- MSME additional loans are extended a guarantee coverage of 90%.
- A. 1 only
- B. 4 only
- C. 2 and 3
- D. 1 and 4
Q3. Under ECLGS 5.0, the additional credit that a single MSME borrower can avail is capped at how much?
- A. ₹50 crore
- B. ₹100 crore
- C. ₹250 crore
- D. ₹500 crore
Q4. With reference to how ECLGS 5.0 differs from its predecessor versions, consider the following statements:
1. Unlike ECLGS 1.0, which was a response to the COVID-19 pandemic, ECLGS 5.0 was triggered by the West Asia geopolitical situation.
2. ECLGS 5.0 extends guarantee cover to scheduled passenger airlines, whereas ECLGS 1.0 at its launch targeted working-capital support to businesses/MSMEs.
3. ECLGS 5.0 is the first version of the scheme to be routed through NCGTC, all earlier versions having been administered by SIDBI.
Which of the statements given above is/are correct?
- Unlike ECLGS 1.0, which was a response to the COVID-19 pandemic, ECLGS 5.0 was triggered by the West Asia geopolitical situation.
- ECLGS 5.0 extends guarantee cover to scheduled passenger airlines, whereas ECLGS 1.0 at its launch targeted working-capital support to businesses/MSMEs.
- ECLGS 5.0 is the first version of the scheme to be routed through NCGTC, all earlier versions having been administered by SIDBI.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q5. The Emergency Credit Line Guarantee Scheme was first introduced in May 2020 as a component of which one of the following?
- A. Aatmanirbhar Bharat Abhiyan
- B. Pradhan Mantri Garib Kalyan Yojana
- C. National Infrastructure Pipeline
- D. PM Gati Shakti National Master Plan
Q6. Across all its versions, ECLGS is administered under the nodal charge of which one of the following?
- A. Ministry of Finance (Department of Financial Services)
- B. Ministry of Micro, Small and Medium Enterprises
- C. Ministry of Commerce and Industry
- D. Reserve Bank of India
Q7. Within the ₹20 lakh crore Aatmanirbhar Bharat package (2020), which single measure provided the largest dedicated liquidity support of ₹3 lakh crore to MSMEs?
- A. Emergency Credit Line Guarantee Scheme
- B. Subordinate Debt scheme for stressed MSMEs
- C. Fund of Funds for MSMEs
- D. Interest subvention for prompt-paying MSMEs
Q8. Under the Aatmanirbhar Bharat MSME measures, the ₹10,000 crore 'Fund of Funds' was designed primarily to:
- A. provide equity funding support to viable MSMEs with growth potential
- B. provide collateral-free additional working-capital term loans to MSMEs
- C. provide subordinate debt to MSMEs classified as NPA or stressed
- D. provide an interest subvention on existing MSME loans
Q9. With reference to the mechanism of credit guarantee schemes such as ECLGS, consider the following statements:
1. They enable lenders to extend collateral-free additional credit to eligible borrowers.
2. The guarantee protects the member lending institution against the amount in default on the covered loan.
3. NCGTC functions as a trustee company that operates such credit guarantee funds.
4. The instrument works by paying a direct cash interest subsidy to the borrower rather than guaranteeing the lender against default.
Which of the above is/are NOT correct?
- They enable lenders to extend collateral-free additional credit to eligible borrowers.
- The guarantee protects the member lending institution against the amount in default on the covered loan.
- NCGTC functions as a trustee company that operates such credit guarantee funds.
- The instrument works by paying a direct cash interest subsidy to the borrower rather than guaranteeing the lender against default.
- A. 1 only
- B. 2 and 3
- C. 4 only
- D. 1 and 4
Q10. In the context of ECLGS, the 'credit guarantee' extended by NCGTC to lenders most precisely means:
- A. an assurance to compensate the lender for the amount in default on the covered additional loan
- B. a cash grant transferred directly to the borrowing enterprise
- C. a full waiver of interest on the borrower's outstanding loan by the government
- D. a government equity investment made in the borrowing enterprise
Q11. The classification of enterprises as Micro, Small or Medium — on the basis of investment and turnover through Udyam registration — is administered by which one of the following?
- A. Ministry of Micro, Small and Medium Enterprises
- B. Ministry of Finance (Department of Financial Services)
- C. Ministry of Commerce and Industry
- D. Ministry of Corporate Affairs
Q12. The West Asia crisis stressed Indian airlines chiefly through a sharp rise in which of the following — typically the single largest component of an airline's operating cost — prompting the aviation support built into ECLGS 5.0?
- A. Aviation Turbine Fuel (ATF)
- B. Airport landing and parking charges
- C. Aircraft lease rentals
- D. Cabin and cockpit crew wages