Union Budget 2017: Foreign Investment Promotion Board scrapped to ease FDI

Jaitley also announced an increase of 36 per cent in FDI flow.

Union Finance Minister Arun Jaitley.

Finance Minister Arun Jaitley during Parliment Budget Session on Wednesday announced scrapping of Foreign Investment Promotion Board to ease the inflow of Foreign Direct Investment (FDI). Jaitley also announced an increase of 36 per cent in FDI flow. “The FDI flow has increased by 36 per cent. The forex reserves are at USD 361 billion in January which is enough to cover 12 months needs,” Jaitley said.

The move has been done to ease the path for foreign companies to invest in the country. Delivering the Budget, the finance minister said that over the last three years, over 90 per cent of FDI proposal have come through the automatic route because of the substantive measures taken by the govt in regard to Foreign Direct Investment policy. “As a result, it makes sense to do away with the FIPB,” Jaitley said.

WATCH VIDEO | Budget 2017: 5 Things You Need To Understand

Jaitley also said that government will announced the roadmap for phasing out FIPB over a period of some time. Presenting govt’s reform agenda to push for stable and stronger institutions, Jaitley said the govt is considering further liberalisation in FDI.

Story continues below this ad

The Foreign Investment Promotion Board is currently the only platform in India which allows for applications to be filed on FDI for approval. The sectors which fall under automatic route do not need any prior approval from FIPB.

“In the meantime, further liberalisation of FDI policy is under consideration and necessary announcements will be made in due course,” he said while presenting the Budget for 2017-18. The minister later said that in most of the foreign investment proposals under the government approval route, an investor has to seek identical approvals. With the abolition of the FIPB, the proposal can be cleared by the ministry concerned itself. Commenting on the move, experts said that the proposal is likely to reduce M&A timelines.

WATCH VIDEO | Impact Of Budget 2017 On Real Estate Sector

EY India stated that this announcement should make FDI vide the approval route a smoother process “especially benefiting single brand retail trading and multi-brand retail trading companies that are looking to invest in India”. Currently, FIPB offers single-window clearance for applications on FDI in India that are under the approval route. The sectors under automatic route do not require any prior approval and are subject to only sectoral laws.

FIPB was initially constituted under the Prime Minister’s Office (PMO) in the wake of the economic liberalisation drive of the early 1990s. The Board was reconstituted in 1996 with transfer of the FIPB to the Department of Industrial Policy and Promotion (DIPP). It was again transferred to the Department of Economic Affairs, under the Ministry of Finance, in 2003. FDI into the country increased by 30 per cent to USD 21. 62 billion during April-September this fiscal.

(with inputs from PTI)

Nagaon, Dhubri, Himanta’s bid to arm people, Himanta Biswa Sarma, Himanta bid to arm people in Assam vulnerable areas, Assam vulnerable areas, Indian express news, current affairs

Himanta’s bid to arm people off to slow start: 266 applications, none accepted

India2 hr ago

Assam government's portal for indigenous citizens to seek arms licenses has received 266 applications. Most applications are from Muslim-majority districts, but 28 have been rejected and none have been accepted. Eligibility criteria include being an indigenous citizen, 21 years old, and residing in a vulnerable area. The government aims to protect those in sensitive areas, not arm young people.

View all shorts

Live Blog

PHOTOS