To stem a widening current account deficit (CAD), the government has roped in public sector oil majors including Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) to raise $4 billion (about Rs 25,000 crore) or more during the remaining six months of 2013-14 through the external commercial borrowing route. CAD refers to the difference between dollar inflows and outflows.
The amount is likely to bring some relief to the government, which is currently battling a high fiscal and current account deficit. .
The issue was first discussed at a recent meeting between Chidambaram and petroleum minister Veerappa Moily after which another meeting was held between Arvind Mayaram, secretary, Department of Economic Affairs and top executives of IOC, BPCL and HPCL besides petroleum ministry officials to work out the details of this exercise.
“IOC has been mandated to raise close to $1.8-$2 billion while HPCL and BPCL have been asked to raise $1 billion (about Rs 6,340 crore) each,” a senior government official said, adding, actual funds inflows could even touch $5 billion.
IOC will raise funds in two tranches of $1 billion each in the third and fourth quarter of 2013-14, sources said. Similarly, HPCL and BPCL will raise $500 million of ECBs by October 2013 and the remaining in the January-March quarter of 2013-14.
The finance ministry has assured “full regulatory support” for this exercise including fast tracking clearances from the RBI for the same, officials said.