The Union Cabinet also approved the continuation of the National Export Insurance Account (NEIA) scheme and an infusion of Rs 1,650 crore as grant-in-aid over five years.
New Delhi: The Union Cabinet on Wednesday approved capital infusion of Rs 4,400 crore in the state-owned Export Credit Guarantee Corporation (ECGC) and listed it on the stock exchange through an IPO. After the cabinet meeting chaired by Prime Minister Narendra Modi, Union Minister Piyush Goyal said that the government will infuse Rs 4,400 crore in ECGC in five years from 2021-22.
The company will be listed next year
He also said that Rs 500 crore will be put in immediately and the company may get listed next year. The minister also said that in the current financial year till September 21, 2021, exports were worth $185 billion.
Export Credit Guarantee Corporation was formed to promote exports by providing credit insurance services to exporters in case of non-payment by foreign buyers due to corporate and political reasons. It also provides insurance to banks against risk in case of exporters taking loans.
With the infusion of capital in ECGC, the company will be able to expand its footprint in the export-oriented industry, especially in the labor intensive sectors. ECGC leads the export credit insurance market in the country with 85 percent market share. Export Credit Guarantee Corporation provides insurance to exporters on their dues. 97 percent of its policy holders are businesses in the MSME sector. Through this, it will also help in providing employment to 59 lakh people. Along with this, the number of workers is also expected to increase by 2.6 lakh.
Scheme to increase exports
The cabinet also approved the continuation of the National Export Insurance Account (NEIA) scheme and an infusion of Rs 1,650 crore as grant-in-aid over five years. The infusion of capital in NEIA will enable utilization of the potential of project exports in the focus market.
The cabinet also approved doubling the estimated cost of Neemuch-Ratlam railway line to Rs.1,095.88 crore and Rajkot-Kanalus railway line to Rs.1,080.58 crore.