Cabinet may decide on FIPB abolition today
The Union cabinet is expected to clear a proposal on Wednesday to allow direct approval to foreign investment proposals by ministries as part of the government’s efforts to expand the ease of doing business.business Updated: May 24, 2017 15:06 IST
In the latest push for ease of doing business, the Union cabinet is expected to allow direct approval to foreign investment proposals by ministries.
The likely clearance of the proposal on Wednesday can also speed up the much-needed investment process amid the Narendra Modi government’s desperate push for job generation.
During this year’s Union budget presentation, finance minister Arun Jaitley had announced that the decades-old Foreign Investment Promotion Board (FIPB), which clears proposals up to Rs 5000 crore, would be scrapped.
India has opened up most of the sectors to enable foreign companies to set up shop in the country. This in turn has reduced the utility of the FIPB.
“The Cabinet is likely to take up the proposal of abolishing FIPB at its meeting on Wednesday,” official sources said.
The Department of Industrial Policy and Promotion, DIPP, will act as the nodal body for all foreign investment proposals, a source added.
The FIPB was initially constituted under the Prime Minister’s Office in the wake of economic liberalisation in the early 1990s. It vets sectors such as defence and retail trading.
After the abolition of the FIPB, sources said, ministries concerned will clear FDI proposals.FDI inflows touched a record $60.1 billion in 2016-17, as the Narendra Modi government eased rules to lure global conglomerates to enter India.
In the last three years, the government has eased 87 FDI rules across 21 sectors to accelerate economic growth and boost jobs.