Staff Reporter | 06 May, 2008
In a bid to enhance the insurance cover for exporters, the government has decided to pump in Rs 100 crore in the Export Credit Guarantee Corporation (ECGC) by way of increasing its equity in the firm.

The move would result in providing additional insurance of Rs 5,000 crore for the crisis-ridden exporters, a senior government official said.

"The provision of Rs 100 crore has already been made in Union Budget for 2008-09," he said.

The additional funds would go into increasing the capital adequacy ratio of ECGC following which it would be able to expand its business.

ECGC offers credit risk insurance cover not only to exporters but also banks which have overseas dealings.

The company did business of 9,201 policy covers up to December 2007 in the previous financial year.

Meanwhile, the government is also considering increasing the corpus of National Export Insurance Account by Rs 150 crore in the current fiscal to ensure availability of credit risk cover for projects and high-value exports.

This would provide additional credit insurance cover to protect long- and medium-term exports worth Rs 1,500 crore against political and commercial risk of the country.

"The Cabinet Committee on Economic Affairs has already approved the provision for increasing government's contribution to Rs 2,000 crore in the NEIA," he said.