New Delhi: Seeking to attract overseas investments, the Reserve Bank will soon come out with a draft paper on liberalising external commercial borrowings (ECB) norms, Economic Affairs Secretary Shaktikanta Das said here today.
Besides, he said, the government is also planning to remove various conditions and restrictions to make the foreign direct investment (FDI) policy more progressive and make the country an attractive investment destination.
“We are in close discussions with RBI. We have had a few discussions in the last few weeks, and very shortly, based on mutual discussions between the Finance Ministry and RBI, the Reserve Bank will be putting out a draft paper for liberalisation of certain ECB norms,” Das said while addressing an Assocham conference.
The liberalised ECB norms would be finalised after inviting comments from stakeholders, he said, adding the norms would be relaxed keeping in view the overall external position and monetary stability.
ECB has implications for monetary stability as it adds to the country’s overall external debt and future repayment liability.
“Very short time will be given for suggestions (by stakeholders). Just to ensure we have not lost out on any point, it will be our effort to liberalise ECB… without causing any harm to essential inherent financial and monetary stability of India. We will, to the extent possible, liberalise various norms so that funds are available to corporates and other investors in India,” he added.
Referring to FDI, Das said the government is looking at further reforming the foreign investment regime.
“The next area we are looking at is with regard to FDI reforms… new sectors have been opened up and sectoral caps have been liberalised, but there is a lot more to do,” he said.
The FDI policy has various conditions and restrictions, he said.
“The effort is to make FDI policy simple and progressive.
I won’t be able to spell out details because it is work in progress,” he added.
The NDA government has relaxed FDI policy norms in various sectors, including defence, insurance, construction, medical devices and railway.
Its ‘Make In India’ drive is aimed at making the country a global investment hub.
The government, Das further said, will continue to take policy initiatives without waiting for the 2016-17 Budget.
“In terms of priority and direction of government policy in coming months and weeks, as we go to the Budget… it’s not the case that the government will wait for the Budget.
Policy initiatives is round the clock, a 24×7 exercise and it will continue. The government will initiate a series of reform measures from time to time,” he said.