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Govt eases ECB guidelines further

India on Wednesday announced further liberalisation of the Exchange Control Board, or ECB, approval guidelines for corporates seeking access to international capital markets, placing cases involving up to $ 50 million under the automatic route and enhancing the RBI's limit to $ 100 million.

At present the Reserve Bank of India, or RBI, is empowered to give ECB approvals under the five-million-dollar scheme and to approve ECBs up to $ 10 million under all other windows.

Under the new guidelines, RBI has been delegated ECB sanctioning powers in cases involving up to 100 million dollars under all windows, a Finance Ministry press note said.

For subsidiary or joint venture companies implementing infrastructure projects, the maximum limit of ECB for financing equity investment was raised last week to $ 200 million from $ 50 million.

It was clarified Wednesday that the following sectors would qualify as infrastructure sectors under the ECB guidelines: power, telecommunication, railways, roads including bridges, ports, industrial parks, and urban infrastructure - water supply, sanitation and sewage projects.

The existing 'all-in-cost ceilings' for normal projects, infrastructure projects and for long term ECBs are on 300, 400 and 450 basis points over six months Libor for the respective currency in which the loan is being raised.

The Indian government has also decided to set up a committee under the chairmanship of joint secretary, Department of Industrial Policy and Promotion, to consider applications for issuance of essentiality certificate for allocation of coal, coke and liquefied petroleum gas, or LPG.

This has been done to provide greater transparency in decision-making and to dispose of proposals in a time-bound manner, according to an industry ministry spokesperson.

The committee will consider applications in cases where the additional requirement of the existing firms is more than 100 per cent of their best annual consumption during the last three years.

Also cases for new units and for substantial expansion will be considered.

The applications should be filed with the Entrepreneurial Assistance Unit, Secretariat for Industrial Assistance, or SIA, Ministry of Commerce and Industry.

UNI

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