The Union Cabinet has now paved way for new regulations to allow the state government entities to have a better access to the foreign countries giving exclusive assistance for chief infrastructure projects. It has spread a ray of hope to all the small-scale and big-scale industries. Once it gets approved, all the eminent as well as not-so-eminent entities would be permitted to undertake a direct ODA loan from several international agencies. In such case, a guarantee will be provided by the state government and a counter guarantee will be given by the Centre.
According to the financial honchos, the important projects like Mumbai Trans Harbour Link (MTHL) would be extremely benefitted by such decision. Pioneered by the Prime Minister Narendra Modi, the decision was taken by the cabinet union and is expected to stride through a long way, thereby improving the financial state of the country.
The Mumbai Metropolitan Region Development Authority has already been sanctioned an approval to borrow from Japan International Co-operation Agency, one of the most sought after foreign bureaus, for the execution of MTHL project. By allowing the state entities to ask direct help from the bilateral funding agencies, the cabinet ministry has actually opened a new arena for them and made it easy to reimburse loans and interests. The central government would be counter guarantee, state government would be prime guaranter for the loan.
Especially, with external aid playing a crucial role in funding main infra projects and social sector projects,Finance Minister Arun Jaitley said "it will not only improve the institutional competence of the entities,at the same time, it will also help the states meet the budget targets and deal with their fiscal responsibility".