Finance Minister Arun Jaitley on Friday addressed the media after attending a meeting called by Prime Minister Narendra Modi to review economic situation in the country amid rupee depreciation and higher fuel prices. Speaking on the Masala Bonds, the Finance Minister said that government has decided to remove restrictions on external commercial borrowings and Masala Bonds to control the Current Account Deficit (CAD).
Finance Minister Arun Jaitley, Finance Secretary Hasmukh Adhia and Department of Economic Affair Secretary Subhash Chandra Garg were also present at the meeting. The meeting will include top Cabinet ministers and bureaucrats. The rupee has been depreciating over the past few weeks. Oppositions parties have demanded that petrol and diesel should be brought under the Goods and Services Tax (GST).
However, the government has repeatedly said the fuel price hike in the country is due to international factors and the government has no control over it.
What are Masala Bonds?
The Masala bonds refer to rupee-denominated bonds through which Indian entities can raise money from foreign markets in the rupee, and not in foreign currency. HDFC was the first Indian company to issue rupee-denominated bonds masala bonds on London Stock Exchange in July 2016.
National Thermal Power Corporation Limited, a state-owned power company, had raised Rs 2,000 crore through issuance of Masala Bonds under its $4 billion medium-term note programme. The Reserve Bank of India has permitted multilateral and regional financial institutions to invest in masala bonds, rupee-denominated bonds issued by Indian entities.