Govt Hints at Further Liberalisation of ECB Norms

New Delhi: The government 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," Department of Economic Affairs Secretary Arvind Mayaram said on the sidelines of an event organised by Ficci. ECB refers to commercial loans in the form of bank loans, buyers' credit, suppliers' credit, securitised instruments availed of from non-resident lenders with a minimum average maturity of 3 years. 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 $5 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. He further said, the government has taken a slew of decisions on the external commercial borrowings side in the last 10 days. "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," he said. "There are large areas that we are already looking at and decisions will be taken," he added. Mayaram also said that the government is looking at the infrastructure category for purposes of harmonisation. He assured that the government will take decision in this regard very soon and clarity will be put in place. On Infrastructure Debt Fund, Mayaram said "we would be notifying the IDF for this year in another 15 days or so." In order to improve storage of foodgrains, he said, there is now a major thrust on creation of value chains on the agriculture logistics side. "In the next three months, we will be putting out a framework for public private partnership for creating storages including warehouses," he said. "Our estimate is that just for food grain storage, total investment required would be 20,000 crore...," he said.