Finance Minister Nirmala Sitharaman on Wednesday said that the government is not averse to the idea of bringing insurance bonds instead of bank guarantees.
Bank guarantees are usually asked for while extending a loan and typically require collateral. An insurance bond is also a surety but it does not require any collateral.
On Tuesday, Finance Secretary T V Somanathan had said that the government is considering introducing insurance bonds as an alternative to bank guarantees.
As per reports last year, insurance regulator Irdai was also looking at the option of insurers offering surety bonds in the context of road projects. Sitharaman, who met the industry captains in the evening, said the government is committed to working towards ensuring policy certainty, adding that the regulators also have a key role in ensuring the same.
She said the government is working with the regulators on this "important issue", as per the statement. The finance minister emphasised the importance of 'India's own equity capital' while addressing the industry and assured government facilitation for sunrise sectors and startups.
Revenue Secretary Tarun Bajaj said his department was working on tax-related issues of startups and sought industry inputs on the same. Sitharaman also assured the industry of addressing issues related to competitiveness, including high power tariffs, and matters related to cumbersome regulatory compliances, the statement said.
(Edited by : Anshul)
First Published: Aug 25, 2021 3:44 PM IST
