Curbs on ECBs to aid IT-BPO sector

By Staff
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Google Oneindia News

New Delhi, Aug 15: Nasscom, IT industry body today accepted the government's fresh restrictions on external commercial borrowings (ECBs) and hopes to help the IT-BPO sector which has been hit hard by the rising rupee.

"This is particularly helpful to the Indian IT-BPO sector, against the backdrop of the too much, too fast rise of rupee against the dollar," Nasscom said in a release here on Wednesday.

Rupee has appreciated against the dollar around 10 per cent so far this year. The industry has been concerned about this trend and its strong impact on the profitability and competitiveness, it said.

According to the government's fresh curbs on ECBs announced yesterday, "henceforth, ECB (of) more than USD 20 million per borrowing company would be permitted only for foreign currency expenditure for permissible end-uses of ECB."

It is aimed at reducing the flow of dollars into the country.

Nasscom said though liberalisation in raising global funds through ECBs is a positive step, the present circumstances are exceptional and warrant some temporary restrictions.

As there is a sharp appreciation of rupee, the top three infotech companies Infosys Technologies, Wipro and Satyam had registered lower profits in the first quarter of this fiscal.

ANI
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