India’s Finance Ministry has raised the External Commercial Borrowings (ECB) limit to USD 500mn from present level of USD 100mn for companies engaged in building roads, ports, power plants, telecommunications and other infrastructure related activities. Government has also raised the minimum average maturity to seven years for all such borrowing above USD 100mn, which will have to be spend in India.
This is the second instance of special revision of ECB norms for infrastructure sector. Earlier, in May government allowed infrastructure companies to borrow USD 100mn for rupee expenditure. This has been done in urgent to help the infrastructure companies in raising capital for the project.
Last year, USD 22bn was raised through ECB and foreign convertible bonds and this fiscal year it is expected to fall to USD 16bn. In first quarter inflows through this route fell by 42% to USD 4.1bn. this has given jitters to the government, which is worried that such drastic decline will take toll of infrastructure related projects in the country.
This is the second instance of special revision of ECB norms for infrastructure sector. Earlier, in May government allowed infrastructure companies to borrow USD 100mn for rupee expenditure. This has been done in urgent to help the infrastructure companies in raising capital for the project.
Last year, USD 22bn was raised through ECB and foreign convertible bonds and this fiscal year it is expected to fall to USD 16bn. In first quarter inflows through this route fell by 42% to USD 4.1bn. this has given jitters to the government, which is worried that such drastic decline will take toll of infrastructure related projects in the country.
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