The government on Tuesday said it will look at the possibility of further liberalisation of external commercial borrowing (ECB) norms to boost inflows from overseas.
“We will continue to look at various spaces of which ECB is one...not only to increase the foreign flow in the country, but also to improve business climate,” said Arvind Mayaram, Department of Economic Affairs Secretary.
Last month, the Finance Ministry had liberalised the norms for raising funds through external commercial borrowing (ECBs) by domestic firms, particularly those in the realty sector.
The High Level Committee on External Commercial Borrowings also permitted FIIs to invest up to $ five billion in rupee bonds within the overall corporate bond limit of $ 45 billion.
Also, the Small Industries Development Bank of India (SIDBI) has been made as “an eligible borrower” for accessing ECB route for on—lending to the Micro, Small and Medium Enterprises (MSME).
“...many of the sectors now require higher foreign exchange denominated loans so we are looking at all of them. We are broadly looking at the possibility,” he said.
“We are also looking at the possibility of allowing those companies which have borrowed from Indian banks to get infrastructure assets outside of their country and there are some very large borrowings on that account, for borrowing abroad and retiring the Indian loans. So, the burden comes down,” said Mayaram.
Mayaram also said that the government is looking at the infrastructure category for purposes of harmonisation.
On Infrastructure Debt Fund, Mayaram said “we would be notifying the IDF for this year in another 15 days or so.”