Government of India sets up Rs 15,000 crore fund to boost shipbuilding industry
- IBEF
- November 20, 2014
New Delhi: The Government of India plans to extend support to the shipbuilding industry with a dedicated fund to be handled by Exim Bank around Rs 15,000 crore (US$ 2.42 billion) of funds. "We are planning to open a dedicated shipping fund within Exim Bank. It is a proposal at an advanced stage," as per Mr Yaduvendra Mathur, Chairman and Managing Director, Exim Bank. The fund will be utilized for financing the construction, and refitting and repair of ships, highlighted Mr Mathur.
The Government has decided to set aside Rs 1,500 crore (US$ 241.5 million) for the purpose, to help serve as the equity and when combined with Exim Bank's capability to leverage ten times, can result in the availability of Rs 15,000 crore (US$ 2.42 billion) in fresh liquidity to the sector. "The National Manufacturing Council is strongly supporting creation of this fund within Exim Bank," said Mr Mathur, adding that the PMO is also supporting the Exim Bank.
In addition, the Government can also take advantage of Exim Bank's capabilities like raising funds through bond issues abroad. The sector has a tremendous potential to emerge as a strong foreign currency earner for the country. At present, private sector companies like Bharati Shipyard Ltd and ABG Shipyard Ltd, are engaged in the sector along with the state-run ones.
Recently the Government had also announced that it will be acquiring three liquefied natural gas (LNG) carriers locally, as part of a programme to acquire 11 such ships. Moreover, the Government has been aggressively advocating the 'Make in India' programme to support local growth. Meanwhile, Mr Mathur added that the Exim Bank is planning to increase its presence in Delhi and may be shifting some officials from the Line of Credit department to the national capital, as their work involves close coordination with Union ministries.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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