NEW DELHI: The Cabinet on Wednesday allowed the listing of Export Credit Guarantee Corporation (ECGC), while clearing an investment of up to Rs 6,000 crore in the company that offers insurance cover to exporters and the National Export Insurance Account Trust.
While Rs 500-crore equity will be immediately provided to ECGC, a matching amount is to be given next year, along with its listing. The remaining funds, commerce and industry minister Piyush Goyal said, will be provided depending on requirement. He said part of equity requirement can also be met through the issue of fresh shares at the time of the IPO, which is likely next year.
For nearly a year, the government has been weighing options to strengthen ECGC, while joining the league of listed public sector companies. The Cabinet’s decision to provide the equity support can be spread over five years, officials added. The government is hoping that the corpus will come handy in doubling its maximum liabilities to over Rs 2 lakh crore.
Similarly, the Rs1,650 crore allocated to the National Export Insurance Account Trust is meant to boost project exports. These exports are typically targeted in West Asian and African countries and also help Indian content.
“Corpus contribution of Rs 1,650 crore will enhance the underwriting capacity of the trust and will enable NEIA to support project exports worth Rs 33,000 crore at full capacity utilisation that in turn will translate into an estimated output of domestically manufactured goods to the tune of Rs 25,000 crore approximately,” an official statement said.
The NEIA Trust extends support to covers issued by ECGC project export and to Exim Bank for Buyer’s Credit tied to project exports from India.
Goyal said that the latest moves are part of an overall exercise to boost exports, with the government setting an ambitious target of $400 billion this year.