What is the govt. measure to use Foreign Exchange for infrastructure promotion? – The budget 2007-08 proposed to use foreign exchange reserve with the RBI, ($6 bn) to be used for infrastructure financing. The government for this purpose will set up two subsidiaries for India Infrastructure Finance Company Limited (IIFC). One wing will borrow funds from RBI to give funds to Indian companies for infrastructure development or will finance their ECBs. Other would invest funds borrowed from RBI to invest in rated collateral securities of Indian companies. (The Deepak Parekh Committee advocated the use of foreign exchange for infrastructure financing).
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