RAS question
What is the maximum credit guarantee coverage under the CGSE scheme?
Correct answer: (B) ₹20,000 crore.
The maximum credit guarantee coverage under the Credit Guarantee Scheme for Exporters is 100% coverage for additional credit facilities up to ₹20,000 crore.
Explanation
CGSE is a credit-support measure for exporters, not a direct grant to firms. The PIB release says the Union Cabinet approved the scheme to provide 100% credit guarantee coverage through the National Credit Guarantee Trustee Company Limited to Member Lending Institutions. Those lending institutions can extend additional credit facilities up to ₹20,000 crore to eligible exporters, including MSMEs. This makes option B the correct ceiling: ₹20,000 crore is the maximum covered credit amount mentioned for the scheme. The point of the guarantee is to back collateral-free credit access, improve liquidity for exporters, support smoother business operations and help exporters diversify into new and emerging markets.
Why the other options are wrong
- (A) ₹10,000 crore understates the ceiling because the cited PIB release fixes CGSE coverage for additional credit facilities at up to ₹20,000 crore.
- (C) ₹50,000 crore overstates the scheme limit; the official approval mentions coverage only up to ₹20,000 crore.
- (D) ₹5,000 crore is too low and does not match the Cabinet-approved CGSE coverage ceiling stated in the PIB release.
Concept
This tests government credit-guarantee schemes within Indian Economy, especially how the state uses guarantees to improve credit flow without directly lending. Such schemes recur in RAS because they connect MSMEs, exports, liquidity and macroeconomic policy instruments.