The government will invest Rs 4,400 crore in Export Credit Guarantee Corporation (ECGC) and the unit will also be listed through an initial public offering (IPO). The Union Cabinet on Wednesday approved a proposal to this effect.
Talking to media persons after the cabinet meeting, Commerce Minister Piyush Goyal said that the listing of ECGC may happen next year. Out of the total Rs 4,400 crore, an amount of Rs 500 crore will be provided to the company on an immediate basis, he elaborated on infusion of funds into the state-owned entity.
ECGC is governed by the Ministry of Commerce and it provides export credit insurance assistance to exporters.
Infusion of funds into ECGC will help the unit to spread coverage, especially for labour-intensive sectors. The company is the market leader in the credit insurance segment in the country with more than 80 percent market share.
The money to be pumped into ECGC will provide more profit to the company while providing insurance cover to the exporters. In fact Mr. Goyal had estimated that after this fund he would be able to provide export insurance of Rs.88,000 crore.
In addition, the Union Cabinet also approved the continuation of the National Export Insurance Account (NEIA) scheme and the provision of a grant of Rs 1,650 crore for it for a period of five years.
The minister said infusion of funds into this unit would help in tapping the export potential in key focus areas.