New Delhi: Sectors such as construction, IT and automobile, which were among the top external commercial borrowers last fiscal, found it difficult to raise funds from overseas during the April-November period this fiscal on account of financial meltdown, says a study.
“External Commercial Borrowings (ECB) by the industry declined steeply by 35.74% to $13.78 billion during April-November 2008 from $21.45 billion in the same period of 2007,” the study by industry body Assocham said.
“Construction, IT, steel, aviation and automobile sectors, which were among the top ECB raisers in the first eight months of 2007, have registered the steepest decline in the same period of 2008 as global liquidity pressure, recession in the developed countries and domestic demand slowdown took toll on the fund raising capacity of the Indian industry,” it said.
Among the sectors, which were the top borrowers of offshore funds in 2007 but recorded maximum dip in ECBs in 2008 include construction (97.34%), IT (95.5 %), steel (91.63%), aviation (86%), automobile and automobile components (78%), the study said.
Of the 51 sectors tracked by the study, 36 sectors have recorded decline in ECBs. The number of companies going for the offshore borrowing route has declined by 19.5% to 345 for the eight-month period compared to 429 in the same period last fiscal, it said.
“We have urged the government to raise the present limit of $50 million for rupee expenditure of the ECB to $100 million to relieve the industry marred by domestic credit squeeze, global liquidity pressure, recession in the developed world and internal demand slowdown,” Assocham secretary general DS Rawat said.