Mumbai: With dollars having dried up due to the global credit crunch and infrastructure firms are in a tight spot, RBI is now working on a package for this sector. India desperately needs better roads, improved power supply and bigger ports but infrastructure companies being in mayhem as liquidity dried up due to global crunch. There seems to be no clear end in sight to the global credit crunch, the infrastructure companies, which have large long-term financing needs, have taken a significant hit.
However, at the same time, a slackening growth in the core sector demands a greater focus on infrastructure spending. Some believe that although India may not have the room for a large fiscal package like China, even a smaller dollar boost may help stimulate demand.
According to sources, the Central Bank may carve out a 10 billion dollar fund from its forex reserve and route it through a SPV or a nodal agency like IIFCL. This money would then be lent to infrastructure companies as an unsecured loan with strict restrictions on end use and the tenor of loan. However. Even as RBI continues to debate on the pros and cons of the plan, experts opine that the timing is perfect to spur infrastructure growth.
However, at the same time, a slackening growth in the core sector demands a greater focus on infrastructure spending. Some believe that although India may not have the room for a large fiscal package like China, even a smaller dollar boost may help stimulate demand.
According to sources, the Central Bank may carve out a 10 billion dollar fund from its forex reserve and route it through a SPV or a nodal agency like IIFCL. This money would then be lent to infrastructure companies as an unsecured loan with strict restrictions on end use and the tenor of loan. However. Even as RBI continues to debate on the pros and cons of the plan, experts opine that the timing is perfect to spur infrastructure growth.
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