Reserve Bank has decided to allow start-ups to raise external commercial borrowings (ECBs) of up to 3 million in a financial year. They will be permitted raise the overseas funds in rupees as well as in foreign currency.
RBI will issue guidelines in this regard by month-end.
India has the third-largest number of start-ups globally. Start-ups have the potential to play a significant role in economic growth and job creation by spurring innovation and injecting competition.
Background:
In January, Prime Minister Narendra Modi had unveiled a slew of incentives for them including tax holiday, inspector raj-free regime, capital gains tax exemption and Rs 10,000 crore corpus to provide funds.
Government has also relaxed procurement norms for them.