INITIAL PUBLIC OFFERING.

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• Recently, the Union Cabinet has approved capital infusion in the Export Credit Guarantee Corporation (ECGC) and its listing through an initial public offering.
• The government will inject Rs 4,400 crore in the ECGC over a period of five years beginning 2021-22.
• The Cabinet also approved continuation of the National Export Insurance Account (NEIA) scheme and infusion of Rs 1,650 crore Grant-in-Aid over five years.

Important points:

• The ECGC Ltd is wholly owned by the Ministry of Commerce and Industry.
• The Government of India had initially set up the Export Risks Insurance Corporation in 1957.
• After the introduction of insurance covers to banks during the period 1962-64, the name was changed to Export Credit & Guarantee Corporation Ltd in 1964.
• It was changed to ECGC Ltd in August 2014.
• ECGC was established to promote exports by providing credit insurance services to exporters against non-payment risks by the overseas buyers due to commercial and political reasons.
• It will enable it to expand its coverage to export-oriented industries, particularly labour-intensive sectors.
• ECGC is a market leader with around 85% market share in the export credit insurance market in India and provided support to exports worth Rs 6.02 lakh, or 28% of merchandise exports, in FY21.
• Micro, Small and Medium Enterprises (MSMEs) form 97% of the client base of ECGC.
• The process of listing ECGC on the stock market is also being initiated so that it can raise more funds.

National Export Insurance Account (NEIA) Scheme:

• NEIA Trust was established in 2006 to promote project exports from India that are of strategic and national importance.
• It promotes Medium and Long Term (MLT)/project exports by extending (partial/full) support to covers issued by ECGC to MLT/project export.
• Exim Bank, in April 2011, in conjunction with ECGC Ltd., introduced a new initiative, viz. Buyer’s Credit under the NEIA scheme, under which the Bank finances and facilitates project exports from India.

SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT