New Delhi: The government on Friday announced a series of measures to strengthen the rupee, including removal of restrictions on external commercial borrowings and “masala bonds” to control the current account deficit. In all, five decisions were taken to improve the current account deficit.

These decisions were taken during a meeting chaired by Prime Minister Narendra Modi with finance minister Arun Jaitley, RBI governor Urjit Patel and senior officials of the finance ministry and the country’s central bank.

Economic affairs secretary Subhash Chandra Garg said while it would be difficult to give a specific number, it should have an impact of $8-10 billion.

Mr Jaitley said to address the issue of the expanding current account deficit (CAD), the government would take the necessary steps to cut down on “non-essential” imports and also increase exports.

However, there was no explanation on what would be deemed “non-essential”, and an official clarified that it would be decided later by the relevant ministries.

“Two decisions have been taken on masala bonds. In this financial year, in relation to masala bonds there will be exemption from withholding tax for issuance done in this year (March 31, 2019),” said Mr Jaitley. He said there will be removal of restrictions on Indian banks marketing masala bonds, including restrictions on the underwriting of masala bonds. It was decided to permit manufacturing sector entities to avail of external commercial borrowings upto $50 million with minimum maturity of one year, against the earlier norm of three years. Also, mandatory hedging conditions for infra bonds would be reviewed.

It was decided to remove the exposure limit of 20 per cent of foreign portfolio investment (FPI) corporate bonds portfolio to a single corporate group and 50 per cent of any issuance.

Mr Jaitley said a series of further measures will be announced in the coming days to help contain the current account deficit. He said during a presentation given by the RBI, it was said that India’s growth was fast compared to other economies and inflation was also in the moderate range. He said the government was confident that it would achieve the fiscal deficit target for the current fiscal year.

However, the finance minister admitted that despite strong fundaments, CAD had been mpacted due to external factors.

The Prime Minister will also be brainstorming over key economic issues and the state of the economy with economists and senior government officials on Saturday. The meeting on Saturday assumes more significance due to the free fall in the value of the rupee and the steep increase in fuel prices, which are at an all-time high. However, till now, the finance ministry has resisted pressure to cut taxes on fuel.

The government is also under considerable pressure from the Opposition parties over high fuel prices. The main Opposition party, the Congress, had called a Bharat Bandh over the issue on Monday.