The Reserve Bank of India has taken measures to liberalise the process with respect to certain types of current account transactions. The measures announced include the following:
- manufacturing and infrastructure companies can avail of external commercial borrowings (ECB) to repay rupee loans towards capital expenditure; this is under the approval route with an overall ceiling of USD 10 billion (RBI circular here); and
- enhancement of the limit of USD 15 billion for FII investment in Government securities by USD 5 billion to USD 20 billion; broad-basing the non-resident investor base in Government securities, by including investors such as Sovereign Wealth Funds (SWFs), Multilateral agencies, endowment funds, insurance funds, pension funds and foreign Central Banks to be registered with SEBI (RBI circular here).
It remains to be seen how far such measures will help boost economic growth in general and also arrest the slide in the value of the Rupee.