Moving a step closer to full capital account convertibility, the government on Friday  eased the overseas investment norms for corporates while allowing prepayment of foreign loans over $100 million.

Finance Minister Jaswant Singh, presenting his Budget for 2003-04, said corporates with proven track record would now be allowed to invest in overseas market in diversified sectors through the automatic route.

"The current restriction limiting such investment to 50 per cent of the net worth of the company will now be raised to 100 per cent," Singh said.

The move is a part of the ongoing efforts of the government to ease capital account mobility.

The government also lifted the $100 million ceiling for corporates willing to prepay external commercial borrowing dues under the automatic route.

"Government is already considering a major review of sectoral limits of investments by foreign institutional investors. In order to facilitate their easy entry into stock markets, the process of their registration will be further streamlined," Singh said.

He said several steps have recently been taken to ease flows of capital. "There will be more initiatives in this regard," he added.

PTI