India Govt. announces measures to boost economic growth

In the latest package, the second announced in less than a month, the government, which faces elections by May this year, said it has removed "all-in-cost" ceilings on External Commercial Borrowing or ECB, besides measures to facilitate access to funds for the housing sector that includes the "development of integrated townships" to be permitted as an eligible end-use of the ECB.

To boost infrastructure spending, the government has authorized India Infrastructure Finance Company Limited (IIFCL) to raise Rs.10,000 crore to refinance bank lending for infrastructure projects. IIFCL has also been authorized to access in tranches an additional Rs.30,000 crore by way of tax-free bonds once funds raised in the current year are effectively utilized.

It also said that non-banking financial companies (NBFCs), dealing exclusively with infrastructure financing, would be permitted to raise money through ECB. These measures would be reviewed after June 30, it added.

To facilitate cash inflow, the government said the investment limit on foreign institutional investors' (FIIs) investment limit in rupee denominated corporate bonds in India has been nearly tripled from $6 billion to $15 billion.

The government also upwardly revised the credit targets of public sector banks and said it will closely monitor on a fortnightly basis, the provision of credit to different sectors by these banks.