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October 08, 2008 12:59 IST
Government on Wednesday ruled out launching of dollar-denominated bonds but indicated that it may further relax overseas borrowing norms and raise FII investment limit in debt instruments to help companies tide over the liquidity crunch created by global financial crisis.
Earlier reports had suggested that the government is considering a sovereign long-term dollar-denominated bond overseas to raise funds to ease Indian banks and companies' access to liquidity, which has been drying up owing to the global financial crisis.
"There is no proposal to launch sovereign long-term dollar-denominated bonds as of now," a finance ministry official said when asked whether the government is planning to hit the overseas market to raise funds.
However, the finance ministry is considering further liberalisation of external commercial borrowings norms for companies besides raising foreign institutional investment limits in Indian debt market.
At present, FIIs are allowed to invest in the Indian debt market up to $8 billion, of which $3 billion can be invested in corporate debts and $5 billion in government securities.
On Tuesday, the government included mining, exploration and refinery sectors under the ambit of infrastructure so that they can access overseas borrowings more liberally up to $500 million into India for rupee capital expenditure.
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