The government is considering to permit developers and units in the special economic zones to raise external commercial borrowings, a move that could reopen the window for mopping up overseas funds.
An announcement to this effect could be made in the Budget scheduled to be unveiled by finance minister Pranab Mukherjee in the Lok Sabha on July 6.
The decision to permit SEZ developers to raise ECBs, sources said, would promote development of the special economic zones, besides helping the government in arresting decline in the foreign exchange reserves.
The government, as part of the Export-Import Policy 2002-07, had allowed the SEZ developers to raise ECBs up to $500 million for maturities of less than three years.
The permission to raise ECBs by SEZ developers was not renewed, L B Singhal, director general of the Export Promotion Council for EoUs and SEZs said, adding 'the latest master circular (of Reserve Bank of India) on ECB guidelines does not provide for this facility.'
"ECB will address the problem of funds at least partially and the RBI should allow the developers to raise money from abroad especially when there is lack of funds domestically," he said.
Several SEZ developers, including realty major DLF, have requested the board of approval in the commerce ministry for de-notification of their SEZs. Besides, several developers are asking the government for more time to complete projects due to lack of funds.
Exports from SEZs grew by 36 per cent to Rs 90,416 crore (Rs 904.16 billion) in 2008-09 from Rs 66,638 crore (Rs 666.38 billion) in the previous fiscal.
