Polls force FIPB operations to screech to a halt

NEW DELHI, Feb 9: Work at Foreign Investment Promotion Board (FIPB) has come to a standstill as a number of officials in the industry and ot...

NEW DELHI, Feb 9: Work at Foreign Investment Promotion Board (FIPB) has come to a standstill as a number of officials in the industry and other ministries have been sent on election duty. Normally the board meets every Saturday but because of the absence of officials it did not hold meeting for the last two weeks as the last meeting of FIPB was held on January 24.

The next meeting may be held only on February 28, officials sources said."The next meeting is unlikely to be held before this month-end but even that is not sure," a source in the industry ministry said.

Foreign companies planning to set up subsidiaries or joint ventures in the country may have to wait till March-end or April for getting clearances for their projects from the government since the approvals given by FIPB have to be vetted by the industry minister.

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The new government is expected to take office only in March-end or early April. The proposal of a number of Indian companies planning to make private placement of equity with foreignentities would also get delayed.

A number of important cases are awaiting FIPB clearances. These include ICI Paints move to pick up a stake in Asian Paints, BAT Industries of UK’s proposal to hike stake in VST Industries and Ranbaxy’s proposal to sell a part of promoters’ stake to a Mauritius-based entity.

There could be further delay due to pile-up of foreign investment applications with the FIPB during this period. In January alone, the Secretariat of Industrial Approvals (SIA) received about 35 foreign investment applications. Majority of these have not yet been taken up by FIPB. At its last meeting on January 24, the board took up as many as 81 cases.

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