Image credits: PTI
Union Minister for Commerce and Industry, Piyush Goyal exclusively spoke to Republic TV as the Centre approved capital infusion of Rs 4,400 crore to ECGC Ltd. The decision has been taken in a bid to provide a massive boost to the exports sector of India. Speaking to Republic TV, Piyush Goyal stated that Indian exports are at an all-time high as the country has touched the 185 billion mark until September 21, 2021.
"This has never been seen before and the first half of the year encourages us to look at much better results in the second half," said Piyush Goyal
The Union Minister added that ECGC ensures the credit and the receivables that exporters draw from the banks. In addition, he stated that 97 per cent of the policyholders are MSME sector players. Goyal added that the Rs 4,400 crore infusion will allow the Centre to increase the insurance cover on the credit that banks provide to the exporters by about Rs 88,000 crore.
"Since credit is usually for two or three months cycle of receivables, this really translates to an increase of Rs 3 lakh crores worth of exports which is about USD 40 billion," he added
Goyal stated that it is a major initiative by the government coupled with an infusion of Rs 1650 crores in the national export insurance agency trust which supports the project finance. The Union Minister revealed that Rs 33,000 crores worth of project finance can be ensured through that medium.
"Collectively, both these exports will help Indian exports to grow in the months to come," said Piyush Goyal
Speaking about the employment that will be generated, Piyush Goyal remarked that COVID-19 hit India and the government decided to turn the crisis into an opportunity. He added that a number of programs were announced under the Aatmanirbhar Bharat initiative and a number of new initiatives were taken like releasing all export overdue in terms of MEIS claims, SEIS claims, RoDTEP, RoSCTL. He added that all these are going to clear this year which will ensure cash flow.
"This particular decision, when it results in increased exports and increased economic activity will logically give a thrust to our exporters and to the entire ecosystem that develops around exports like trucking, hotels, taxi drivers, the entire freight movement. The entire ecosystem gets a boost. Lakhs of young boys and girls will get job opportunities in the formal and informal sector," Goyal added
Union Minister Piyush Goyal on Wednesday approved the listing of Export Credit Guarantee Corporation of India through an Initial Public offer on the stock exchange. Addressing a press conference, Goyal said:
"Government under the leadership of Prime Minister Narendra Modi has undertaken a series of measures to provide a boost to the exports sector. In line with this, the Government has today approved capital infusion of Rs 4,400 crore to ECGC Ltd. (formerly known as Export Credit Guarantee Corporation of India Ltd.) over a period of five years, that is, from FY 2021-2022 to FY 2025- 2026. The approved infusion along with efforts made to suitably synchronize with the listing process of ECGC through the Initial Public Offering will increase the underwriting capacity of ECGC to support more exports."
Cabinet Committee on Economic Affairs (CCEA), in its release, said that ECGC was established by the Government of India under the Companies Act in 1957 to promote exports by providing credit insurance services to exporters against the non-payment risks by the overseas buyers due to commercial and political reasons. ECGC plays a wider role in supporting exports from labour-intensive sectors and encourage bank lending to enterprises of small exporters thereby leading to their revival.
Capital infusion in ECGC will enable it to expand its coverage to export-oriented industry particularly labour-intensive sectors. The approved amount will be infused in instalments thereby increasing the capacity to underwrite risks up to Rs 88,000 crore and this will enable ECGC to issue covers that can support additional exports of Rs 5.28 lakh crore over the five-year period in line with the existing pattern.