Finance Minister Arun Jaitley has said that the government will review mandatory hedging conditions for infrastructure bonds, as part of its effort to contain current account deficit. Addressing the media after attending a meeting with Prime Minister Narendra Modi on the current economic condition in the country, FM Jaitley said that the government has taken 5 decisions to control the current account deficit and is confident that it will meet its fiscal deficit target.
Speaking on the current account deficit situation, FM Jaitley said that the steps taken by the government will have a $5-10 billion effect on the economy, taking it to a more stable condition. Apart from reviewing mandatory hedging conditions for infrastructure bonds, the Masala Bonds which were issued in FY19 will now be exempted from withholding tax. Further, in an attempt to boost the imports, the government will curb the imports on non-essential items will also come into effect.
Also Read: What are Masala Bonds?
Moreover, in order to boost the manufacturing industry, they will now be able to avail loans up to $50 million of maturity of 1 year.
The review meeting called by Prime Minister Narendra Modi can be seen in the wake of depreciating rupee value as it touched an all-time low of Rs 72.91 per US dollar on Wednesday while on Friday, it improved a bit, closing at Rs 71.85 per US dollar.
Meanwhile, the government is already under pressure due to the rising cost of petrol and diesel. The one-litre cost of petrol is currently somewhere around Rs 80 per litre and in some metros, it is close to Rs 90, therefore, controlling the depreciating value of rupee per US dollar is currently government initial objectives.