New Delhi: Indian companies bidding for strategically important infrastructure projects abroad will be able to get concessional finance from state-run Exim Bank, under a scheme approved by the Union cabinet on Wednesday.
An official panel chaired by the secretary in the department of economic affairs will decide on projects of strategic importance on a case-by-case basis, information technology minister Ravi Shankar Prasad told reporters after a cabinet meeting. The committee will also monitor such projects after the financing is cleared.
The committee will also consider financing such projects through other public sector banks as well.
“There are a number of Indian large project implementation companies which have developed a lot of expertise in building large infrastructure projects. However, they have not been able to win contracts abroad due to higher cost of finance in India," an official release said.
“With Indian companies taking contracts for setting up strategic projects overseas, the concessional financing will help them," Prasad said.
This comes in the backdrop of a race for resources in places such as Africa, where India has been trying to leverage its aid and loan programmes to counter Chinese influence. Also, India is hosting the summit of African states in October in New Delhi.
The Exim Bank’s annual report for 2014-15 said it has supported 105 project export contracts secured by 56 Indian companies in 40 countries, reflecting the capabilities of Indian corporates to secure and execute a diverse range of projects.
Approval was also given for the proposal to promulgate the Negotiable Instruments (Amendment) Ordinance, 2015. The proposed amendments to the Negotiable Instruments Act, 1881 seek to clarify jurisdiction-related issues for filing cases for offence committed under section 138 of the Act. A cabinet note said, “The clarity on jurisdictional issues for trying cases of cheque bouncing would increase the credibility of the cheque as a financial instrument. This would help trade and commerce in general and allow the lending institution, including banks, to continue to extend financing to the economy, without the apprehension of loan default on account of bouncing of a cheque."
The Negotiable Instruments (Amendment) Bill, 2015 was introduced in the Lok Sabha on 6 May and was passed by the Lok Sabha on 13 May. However, since the Rajya Sabha was adjourned sine die on 13 May, the Bill could not be discussed and passed by that House.
Additionally, the cabinet committee on economic affairs approved doubling of the Hotgi-Kudgi-Gadag railway line at an anticipated cost of ₹ 1,618 crore and completion cost of ₹ 2,058 crore. Out of this, ₹ 946 crore (completion cost) is already received from NTPC under the customer funding model for doubling of the stretch between Hotgi-Kudgi (134 km) and the remaining amount of ₹ 1,107.58 crore will be funded through the gross budgetary support of ministry of railways or extra budgetary resources, or both.
This will provide the necessary line capacity for introduction of additional trains and smooth movement of rakes to a number of industries such as integrated steel, power and cement plants that are coming up along the route.