Finance minister Arun Jaitley is expected to revamp India’s foreign direct investment (FDI) norms to make it easier for multinationals and other foreign investors to invest in this country.
Though no goals have been set yet, the thinking is to double annual inflows to $50 billion over the next couple of years, sources in the ministry said.
A policy paper prepared by the finance ministry proposes to raise the cap for automatic approvals to 49%. Companies have complained that their investment proposals often get tangled in the red tape that accompanies the approval process in India, thus, delaying projects and discouraging potential investors.
"All sectors, apart from a few strategic ones, will come under this 49% automatic approval route," said the official, adding: "You can expect more measures to boost investment once Mr Jaitley completes the process of meeting all the officials and taking stock of the economic situation."
All eyes are now set on the new government and the measures that it takes to boost growth while winning back investors confidence.
"There has been a huge change in perception of the Indian economy especially after the new government took over and expectations are that the country will go back to the high growth path," Dipak Dasgupta, former principal economic adviser to the finance ministry, said.
"The focus should be on bringing FDI in manufacturing which is labour intensive," he added.
"The Confederation of Indian Industries (CII) anticipates a resurgence of FDI flows spurred by investor friendly policies of a stable government," Chandrajit Banerjee, director general, said.
The expectations that the new government would adopt an investor-friendly approach in policy formulation has been a huge mood lifter and rekindled confidence in the investor community, both domestic and foreign, that the government means business, Banerjee added.