The central government is planning to further relax the norms for raising funds through the external commercial borrowing (ECB) in the country.

The government is looking to relax borrowing norms for low-cost housing and infrastructure sectors like telecom and ports in the country to boost investment in the core sector. The move will allow Indian firms to borrow cheaper funds from abroad.

Officials from the union finance ministry and Reserve Bank of India (RBI) are expected to meet this week to consider relaxation of ECB norms for the core infrastructure sector in order boost streamline capital flows into the country. It will also help the government to control the widening current account deficit (CAD) in the financial year.

ECB liberalisation is likely to help in financing of deficit by the government and also boost the core infrastructure sector in the country, according to finance ministry officials. Borrowers will easily be able to raise dollar-denominated loans directly from international banks, international capital markets, multilateral financial institutions like IFC and ADB, export credit agencies, suppliers of equipment, foreign collaborators and foreign equity holders through the ECB route.

The government has also allowed borrowing of upto $1 billion for low-cost housing in December 2012.