New Delhi: The Budget proposal to allow aviation sector to raise up to $1 billion through external commercial borrowing (ECB) route for capital requirements is likely to be implemented next week.
"Next week ...[probably on] April 26," Joint Secretary in Finance Ministry, Thomas Mathew, told reporters when asked about the timeline for implementation of the ECB proposal.
However, the ECB window to the civil aviation sector would be available for one year only.
The policy decision is likely to help cash-strapped private carriers, like Kingfisher to raise working capital from abroad.
So far, airlines were allowed to raise foreign capital only for import of capital equipment like aircraft.
In the Budget for 2012-13, Finance Minister Pranab Mukherjee had proposed to permit up to $1 billion ECB for working capital requirements of the airline industry.
The ECB route for the sector is being considered at a time when the government is actively considering a proposal to allow foreign airlines to buy up to 49% equity of domestic carrier.
The Department of Industrial Policy and Promotion (DIPP) has moved a Cabinet note in this regard.
18/04/12 Press Trust of India/Business Standard
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