"The infrastructure deficit has been widening year after year and is one of the principal reasons holding back economic growth. Finding money for infrastructure projects, which have long gestation periods, has been an especially challenging task. The Finance Minister has proposed strengthening financial institutions dedicated to infrastructure. The pool of tax free infrastructure bonds for domestic investors is being expanded."
The Hindu : Opinion / Editorial : Perils of short-termism: Less useful and inherently more controversial initiatives have been the relaxations in the rules pertaining to external commercial borrowings (ECBs). The new policy is not the panacea that it is claimed to be. On the contrary, it is a reversal of past policies that sought to restrain such borrowings.
Typically of a short duration, such ECB borrowings carry a huge exchange rate risk, which is magnified by the recent volatility in the foreign exchange markets. A steep increase in short-term external debt is something that needs to be avoided.
The clear message is that short-termism does not pay, not even in the limited context of infrastructure finance.
The Hindu : Opinion / Editorial : Perils of short-termism: Less useful and inherently more controversial initiatives have been the relaxations in the rules pertaining to external commercial borrowings (ECBs). The new policy is not the panacea that it is claimed to be. On the contrary, it is a reversal of past policies that sought to restrain such borrowings.
Typically of a short duration, such ECB borrowings carry a huge exchange rate risk, which is magnified by the recent volatility in the foreign exchange markets. A steep increase in short-term external debt is something that needs to be avoided.
The clear message is that short-termism does not pay, not even in the limited context of infrastructure finance.
No comments:
Post a Comment
To check spam, comments on older posts are moderated, so expect some delay before your comments are published