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Jan 21: Indian policymakers may make it easier for companies to tap foreign funding, as a prolonged cash squeeze makes it tough for firms to borrow at home.

Investors are speculating about potential steps Finance Minister Nirmala Sitharaman could unveil when she presents the nation’s budget on Feb. 1. These measures may include freeing up firms to borrow at higher rates and offering tax breaks to global funds.

“The government will need to relax local rules to make it easier for Indian companies to raise debt overseas and tide over the funding crunch in the onshore market,” said Raj Kothari, London-based head of trading at Jay Capital Ltd. “At the same time, they need to ensure that the borrowers tapping offshore markets abide with stricter corporate governance so as to avoid further defaults.”

A prolonged crisis in India’s shadow bank sector and a pile of bad loans at traditional lenders is making it expensive for Indian companies, other than the best-rated firms, to access funding. The government has tried a series of measures to spur domestic credit, including providing so-called credit enhancement and allowing tiny firms to restructure debt.

Here are some steps Sitharaman may consider to spur foreign borrowing:

• She could raise the cap of 450 basis points above Libor, which limits overall foreign debt costs for Indian companies

• This could help lower-rated firms sell bonds abroad. Indian companies rated BBB currently borrow at more than 10%, about 3.8 percentage points more than their top-rated peers;

• Sitharaman could waive the withholding tax foreign investors need to pay on holdings of rupee-denominated debt sold by Indian companies abroad

• The waiver was offered between September 2018 to March 2019, but wasn’t extended as the highest global interest rates since the financial crisis deterred Indian borrowers. Since then, the three-month Libor has dropped by about 1 percentage point

• She could permit Indian property developers and housing finance lenders to sell overseas bonds for reasons beyond affordable housing projects

• New funding lines to the real estate sector, arguably ground zero of India’s economic slowdown, could help kickstart consumption and investment as the industry is the nation’s biggest job-creator.

New Delhi, Jan 20: Security has been beefed up at airports across the country after a suspicious bag was found at the Mangaluru airport on Monday.

According to Central Industrial Security Force (CISF), which guards the airports in the country, a man was captured in the CCTV dropping the bag inside Mangaluru airport.

According to the CISF DIG Anil Pandey, traces of improvised explosive device (IED) have been found from the bag.

"According to CCTV footage, a suspect kept the bag at Mangaluru airport and was then seen leaving in auto while concealing his face. The suspected object was detected timely and local bomb disposal team is working on its disposal," DIG Pandey told media.

"We have found traces of IED from a bag lying at a ticket counter in Mangaluru airport, we have safely evacuated it," DIG Pandey told media.

According to sources, initial investigations have revealed that the bag contained some type of black powder.

"Initial investigation has revealed that the bag contained a black powder which seems to be explosive, though it is yet to be cleared what kind of explosive it is," sources claimed.

"After we found the suspicious bag at Mangaluru airport, a security drill has been initiated at all the airports and CISF staff have been asked to beef up security," DIG Pandey said.

Also Read: IED recovered from Mangaluru Airport defused safely; 3 teams formed to nab suspect: Top cop