Money & Banking
RBI revises oversees borrowing limits for India Inc
Aiming to encourage the flow of foreign funds into India, the country's central bank on Monday revised a major guideline which administered the oversees borrowing limits for India Inc.
 
The Reserve Bank of India (RBI) said that it has revised the framework governing the external commercial borrowing (ECB) facility for the Indian industry.
 
It said that the revised framework has been drafted considering the current macro-economic developments and the experience gained over the last 10 years.
 
The RBI elaborated that the new framework takes a more liberal approach towards ECB, with fewer restrictions on end uses and higher all-in-cost ceiling.
 
Similarly, the new norms, take a more liberal approach for Indian rupee (INR) denominated ECBs, where the currency risk is borne by the lender.
 
Furthermore, the list of overseas lenders have been expanded to include long term lenders like sovereign wealth funds, pension funds and insurance companies.
 
However, the RBI has maintained a small negative list of end-use requirements applicable to long-term ECBs and INR denominated ECBs.
 
Other major features of the new policy include, raising of limit for small value ECBs with minimum average maturity (MAM) of 3 years to $50 million from the existing $20 million.
 
The Indian apex bank said that the framework for ECB as a means to attract flow of funds from abroad will continue to be a major tool to calibrate the policy towards capital account management in response to evolving macro-economic situation. 
 
Commenting on the latest reform measure, Shaktikanta Das, secretary economic affairs, with finance ministry twitted that the government, RBI, SEBI are working together with positive interaction and understanding and will continue to work for reforms and stability.
 
In addition to the latest reform measure, RBI said that it will review the new ECB guidelines after one year based on the experience and evolving macro-economic situation.
 
In September 2015, RBI had placed the draft proposal for new ECB framework in the public domain for wider consultation.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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India needs $2.8 trillion investment for energy supply: Report
India requires a whopping $2.8 trillion investment to meet its growing energy needs in the coming years, with 75 percent of that for the power sector, a special report by the International Energy Agency (IEA) said on Monday.
 
"India's energy needs require a huge commitment of capital to the tune of $2.8 trillion. Mobilising cost-efficient investment above $100 billion per year will be a challenge for the Indian policy at national and state levels," the report noted.
 
The special report on future development in India, which is a part of the agency's World Energy Outlook 2015', was released here at a workshop organised by the city-based Centre for Study of Science, Technology and Policy (CStep) and IEA.
 
"A transparent system of approvals and clearances for viable projects with timelines and accountability is essential to win public consent. India will also need to tap investors and sources of finance on suitable terms for low-carbon investment," the report pointed out.
 
As the release coincided with the UN Climate Summit (COP-21) in Paris, the report said sustainable and affordable energy was indispensible to India's economic growth and poverty reduction, as the country's carbon intensity was a critical measure of the success or failure of efforts to tackle climate change.
 
Prime Minister Naredra Modi also addressed CoP-21.
 
The Paris-based autonomous agency (IEA) was set up in 1974 to promote energy security among its 29-member countries through collective response to disruptions in oil supply and provide research and analysis on ways to ensure reliable, affordable and clean energy for its members and others.
 
Observing that what happened in India would influence the global energy economy, the report highlighted that as the country was growing fast, energy was central to its socio-economic growth and fuel demand for greater mobility and infrastructure development to meet the needs of the world's populous country.
 
"Though home to 18 percent (1.3 billion) of world population, India uses only six percent of the world's primary energy despite its consumption almost doubling since 2000 with potential to grow further," the report noted.
 
More than any country, India will contribute to the projected rise in global energy demand though its energy demand per capita will be still 40 percent below the world average.
 
"India's total energy demand doubles, propelled by an economy that is five times larger in 2040 and a demographic expansion that makes it the world's most populous country," the report indicated.
 
With energy use declining in many developed countries and China entering a less energy-intensive phase in its development, India emerges as a major driving force in global trends, with modern fuels and technologies playing a part.
 
"Surging consumption of coal in power generation and industry makes India the largest source of growth in global coal use. Oil demand increases by more than in any other country, approaching 10 million barrels per day by 2040," report added.
 
The report was compiled with inputs from industry and leading academic and research organisations.
 
CStep executive director Anshu Bhardwaj highlighted the importance of the report for the CoP-21 meeting.
 
IEA's resources and investment unit head Tim Gould presented the key findings, while CStep advisor S.S. Krishnan cited the agency's key pillars from energy perspective.
 
Representatives from government, academia and industry participated in the interactive workshop.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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GE, Alstom ink JVs for rail engine plants in Bihar

GE Transport India managing director Nalin Jain and Railway Board director (mechanical works) Jayant Kumar signed for Marhowra plant, while Alstom Transport India managing director Bharat Salhotra and Railway Board executive director (electrical development) Sudheer Kumar signed for Madhepura plant

 

America's General Electric (GE) and France's Alstom on Monday signed joint venture (JV) agreements with Indian Railways to set up high horse power diesel and electric engines at Bihar's Marhowra and Madhepura at a combined cost of Rs.40,000 crore.
 
"High-tech diesel locomotives will roll out from Marhowra factory and hi-tech electric locomotives from Madhepura factory," an official statement after the agreements were signed by top officials in presence of Finance Minister Arun Jaitley, Railways Minister Suresh Prabhu, central ministers from Bihar and other dignitaries.
 
GE Transport India managing director Nalin Jain and Railway Board director (mechanical works) Jayant Kumar signed for Marhowra plant, while Alstom Transport India managing director Bharat Salhotra and Railway Board executive director (electrical development) Sudheer Kumar signed for Madhepura plant.
 
GE Transport chief executive Jamie Miller and Alstom chief executive Henri Poupart-Lafrage were also present on the occasion.
 
Marhowra is about 80km from Patna, while Madehpura is 290 km from the state's capital.
 
As per the deal, Marhowra plant will make 4,500HP (horse power) and 6,000HP diesel engines, which in combination can operate as 9,000HP and 12,000HP units, while Madhepura will produce 12,000HP electric locomotives.
 
"About 1,000 diesel locos will be manufacture in 11 years at a cost of Rs.14,656 crore and 800 electric locos in 11 years at Rs.19,904 crore. Taking into account cost of setting up plants and maintenance facilities, the twin projects together will cost Rs.40,000 crore," the statement said.
 
The high horse power electric and diesel engines will be used for heavy haul freight operations in the dedicated freight corridors.
 
Early this month, the railways awarded letters of acceptance for both the plants as part of the government's 'Make in India' programme to indigenise production of modern transportation solutions and create thousands of jobs.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

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