Against the backdrop of a widening current account deficit, the finance ministry announced a series of measures to boost capital inflows and to curb the depreciation in the rupee.
Late on Friday night, Arun Jaitley after a long meeting with Prime Ministry Modi addressed a brief media meet stating a five-point strategy:
- Mandatory hedging conditions for infrastructure loans through the external commercial borrowing (ECB) route will be reviewed.
- 20 percent exposure limits of foreign portfolio investors' corporate bond portfolio to a single corporate group, company and related entities will be removed, and 50 percent of any issue of corporate bonds will be reviewed.
- Manufacturing sector entities will be permitted to avail external commercial borrowings up to $50 million with a minimum maturity of one year instead of the earlier period of three years.
- Masala Bond issues done in the current financial year will be exempted from withholding tax.
- Restrictions on Indian banks' market making in Masala Bonds, including restrictions on underwriting of such bonds, will be removed.