Page 14 - Banking Finance September 2020

ROUNDUP

Increasing commercial bor- cally accumulates to address shortage Minimum qualification for
of domestic savings, India is no excep-
rowings push up external tion to this phenomenon. board members of insol-
debt by 2.8% vency professional agen-
India's total external debt increased by Final approval given to 37 cies proposed
2.8 per cent to USD 558.5 billion at the mega food parks: Ministry
The Insolvency and Bankruptcy Board
end of March mainly on account of a The Food Processing Ministry said that of India (IBBI) has proposed setting
rise in commercial borrowings, accord- so far it has given final approval to 37 minimum qualifications for members of
ing to a report released by the Finance mega food parks in 23 States and UTs governing boards of insolvency profes-
Ministry. The external debt stood at and are under various stages of imple- sional agencies (IPA) as well as intro-
USD 543 billion at end-March 2019.
mentation. ducing periodic self-evaluation by such
The ratio of foreign currency reserves In a written reply, the Ministry in- agencies to strengthen their role in
to external debt stood at 85.5 per cent formed the Lok Sabha that 19 mega regulating work of insolvency profes-
as at end-March 2020, as compared to food parks out of the 37 are currently sionals (IPs).
76.0 per cent a year ago, the report operational and that the government IPAs monitor the conduct and perfor-
said.
had envisaged a total of 42 mega food mance of IPs and initiate appropriate
External debt as a ratio to GDP rose parks. action against their members who do
marginally to 20.6 per cent as at end "This scheme is now a component of not comply with provisions of the Insol-
March 2020 from 19.8 per cent a year the new Central Sector Umbrella vency and Bankruptcy Code (IBC).
ago, 'India's External Debt: A Status Scheme- Pradhan Mantri Kisan The IBBI has proposed an amendment
Report: 2019-2020' showed.
Sampada Yojana (PMKSY). The Mega to the bylaws of IPAs to set certain
Compared to end-March 2019, sover- Food Park Scheme (MFPS) aims at pro- minimum qualifications for the appoint-
eign debt shrank 3 per cent to reach viding modern infrastructure facilities ment of independent and shareholder
USD 100.9 billion, it said, adding, this for food processing along the value directors, which may include expertise
decrease was primarily due to a fall in chain from farm to market," it added. in fields of finance, law, economics,
FII investment in G-Sec - the second management or insolvency.
largest constituent - by 23.3 per cent As per the scheme guidelines, each fully
to USD 21.6 billion from USD 28.3 bil- operational mega food park will provide Rs. 1.61-tn loans sanc-
lion a year ago. direct/indirect employment to 5,000
persons. The schemes aims to have a tioned to MSMEs under
Loans from multilateral and bilateral positive impact on increased realisation
sources under external assistance- the of farmers, reduction in wastage and credit guarantee scheme
largest constituent of the sovereign creation of an efficient supply chain The Finance Ministry said banks have
debt - grew 4.9 per cent to USD 87.2 sanctioned loans of about Rs. 1,61,017
backed by collection centres, primary
billion, it said. crore under the Rs. 3-lakh crore Emer-
processing centres and logistic infra-
Non-sovereign debt, on the other structure, the Ministry added. gency Credit Line Guarantee Scheme
hand, it said, rose 4.2 per cent to USD (ECLGS) for the MSME sector reeling
The scheme provides for a capital
457.7 billion mainly due to an increase grant at the rate of 50 per cent of the under the slowdown caused by the
in commercial borrowings - the largest project cost (excluding land cost) in coronavirus pandemic.
constituent - by 6.7 per cent to USD general areas and at the rate of 75 per However, disbursements against this
220.3 billion. stood at Rs. 1,13,713 lakh crore till
cent of the project cost (excluding land
Outstanding NRI deposits - the second cost) in difficult and hilly areas - North September 3.
largest constituent - at USD 130.6 bil- East Region including Sikkim, J&K, The scheme is the biggest fiscal com-
lion was almost equal to the level a Himachal Pradesh, Uttarakhand and ponent of the Rs. 20-lakh crore
year ago, it said. ITDP notified areas of the States sub- Aatmanirbhar Bharat Abhiyan package
In most emerging markets, as the ject to a maximum of Rs. 50 crore per announced by Finance Minister
economy expands, foreign debt typi- project. Nirmala Sitharaman in May to miti-

14 | 2020 | SEPTEMBER | BANKING FINANCE