After the Finance Minister in his Budget speech announced to abolish Foreign Investment Promotion Board (FIPB) and come up with a new mechanism that could include approvals by the ministries concerned for expeditious clearance of foreign investment proposals, Commerce and Industry Minister Nirmala Sitharaman has said that the idea of winding up FIPB will further improve ease of doing business.
She pointed that an additional layer in the form of FIPB is not any longer required since majority of the investments (around 92 percent) coming in are through the automatic route. For the rest of the FDI, that every department concerned (the sectors under approval route) has a framework or a regulator for it and if there is a regulator for that department concerned that is sufficient to take care of the screening and approval of investment proposals. She added that the decision to abolish FIPB is in line with the government's policy for ‘maximum governance and minimum government’.
Earlier, Economic Affairs Secretary Shaktikanta Das, who heads the FIPB, had said that government is planning to bring a new mechanism in another two months to replace the body. At present, FIPB offers single-window clearance for applications on FDI in India that are under the approval route and the sectors which are under the automatic route do not require any prior approval and are subject to only sectoral laws.