Economic Affairs Secretary Shaktikanta Das has said that the government is looking to simplify foreign direct investment (FDI) policy with an aim to remove some of the conditions that investors need to fulfill while investing in the country as it looks to further ease procedures to attract more investment, including domestic, at a time when the RBI has cut rates too. The government will not just look at increasing FDI limits in sectors but also put more sectors on the automatic route, among other measures.
Das said that Foreign Investment Promotion Board (FIPB) will now meet twice a month to speed up approvals, signaling the clear intent of the government in order to push ahead the reforms on a wide range of issues. Das further said that the Sectoral caps need to be revised and the process of approval should be automatic unless there are security concerns or in sensitive sectors.
Das said that the FIPB presently meets an average of once every month while the entire approval process take more than three months even for investments of a few crores of rupees. Besides, the current policy has sectors in which no investment is allowed while others are open to levels such as 26 per cent, 49 per cent, 74 per cent and 100 per cent, depending on how sensitive they are. The policy document, which is more than 120 pages long, has a number of conditions for every sector.