NRI bonds for infra funding, says Arvind Mayaram

MUMBAI: Government is mulling to raise money overseas by a bond sale to NRIs to support infrastructure finance needs and not to prop up the steeply falling rupee, a top official said today.

"We are not looking at bonds to support the currency. We are looking at bonds for generally raising capital for infrastructure," Economic Affairs Secretary Arvind Mayaram told reporters on the sidelines of an investor conference here.

Yesterday, Chief Economic Advisor Raghuram Rajan had hinted that the government might go in for NRI bonds to raise the badly needed foreign exchange.

"We will be looking at all options for safe financing of CAD...It is still early days," Rajan had said, while trying to talk up the rupee, which had hit a life-time low of 58.98 to the dollar intra-day yesterday.

Mayaram today said the government keeps on evaluating multiple options of resource mobilisation on a regular basis and the NRI bonds issuance is a part of the same.

"We keep looking at different instruments and bonds are a instrument we are looking at for raising resources for long-term infrastructure financing," Mayaram said.

The rupee has been in a downward spiral of late and has lost 6 per cent since May.

The high current account deficit is being blamed as a major concern for the fall in the rupee. The dollar is also strengthening against other currencies globally.

The domestic currency has been going through a phase of depreciating lasting up to a month over the last two years.

The idea of issuing bonds to be subscribed by the diaspora has been speculated during each such phase. The government had raised billions of dollars through offerings like the India Resurgent Bonds and India Millennium Deposits in 1998 and 2000, respectively.