India to allow power companies to raise 40% financing in overseas debt
India will allow power companies to raise overseas debt to finance up to 40 per cent of their rupee debt on existing projects, compared with the current limit of 25 per cent, likely in the next seven days, a finance ministry official said.
The country would also allow external commercial borrowings (ECB) for the airline industry's working capital for one year, with a ceiling of $1 billion, by end-April, said Thomas Mathew, who heads the capital markets division in the finance ministry.
ECB for capital expenditure on toll systems for roads and highways will also be allowed in the next seven days, Mathew told reporters.
Last month, Finance Minister Pranab Mukherjee had said in the annual budget for 2012/13 that ECB would be permitted or increased in power projects, highway toll projects, airline industry, and low-cost housing.
India currently has a $30 billion overall cap on companies' overseas borrowing during a financial year. Mathew said there was currently no proposal to lift that cap, but it will be discussed if the need arises.
"The overall ceiling will not be a limiting or constraining factor," he added.
Copyright @Thomson Reuters 2012
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