Infrastructure project developers such as Punj Lloyd and L&T with overseas projects can now avail of cheap loans from the Indian Exim Bank, but with some conditions.
The Union Cabinet on Wednesday approved the setting up of a committee that will advise the Exim Bank on offering concessional finance to Indian companies bidding for infrastructure projects abroad.
The Cabinet decision was taken as many Indian companies found it difficult to win contracts abroad due to the higher cost of finance in India and felt it necessary to help such companies, an official statement said.
A committee to be headed by the Secretary, Department of Economic Affairs, and comprising representatives of the Department of Expenditure, Ministry of External Affairs, Department of Industrial Promotion and Policy, Department of Commerce, Department of Financial Services and Ministry of Home Affairs and the Deputy National Security Adviser, will decide on the eligible projects.
The Committee will also have powers to levy conditions within reasonable limits and may also insist on sourcing at least 75 per cent of the project requirements from India, if it is found to be compatible with the request for bids.
“The repayment of the loan would be guaranteed by the foreign government. The Committee will also consider financing strategic projects through public sector banks other than Exim Bank on the same terms,” the statement added.
VRS scheme okayedThe Cabinet also approved the introduction of an improved Voluntary Retirement Scheme for employees of Hooghly Dock & Port Engineers Ltd (HDPEL) and restructuring of the company through a joint venture.
“Implementation of the improved VRS package would substantially reduce the manpower of HDPEL and would help in downsizing. Thereafter, HDPEL would become amenable to re-structuring,” the statement said.
Meanwhile, the Cabinet Committee on Economic Affairs approved doubling of the 284-km Hotgi-Kudgi-Gadag railway line, which goes from near Solapur in Maharashtra to the northern part of Karnataka.
The doubling will cost ₹2,058 crore and help power, steel and cement plants coming up along the route.
“This doubling work will provide the necessary line capacity for introduction of additional trains and smooth movement of rakes to/from the industries/power plants. This will also boost overall development of the region. In view of the industrial activities taking place in the area, demands are also being received for running of additional train services through this route,” an official statement said.
The doubling work will be funded partly through ₹946 crore received from NTPC under the Customer Funding Model and the remaining ₹1,107.58 crore will come from the Gross Budgetary Support of the Rail Ministry or Extra Budgetary Resources or both.