Indian Economy News

Most foreign investment will not need prior nod: FM Arun Jaitley

New Delhi: The liberalisation of the foreign direct investment regime signals the NDA government's commitment to economic reforms and will help in boosting growth in the years to come and significantly reduce the role of the foreign investment promotion board, finance minister Arun Jaitley said on Monday.

"The government is committed to carry on the reforms process. Today's FDI reform is one important step in that direction," Jaitley told TOI in an interaction soon after the government unveiled the reform measures.

"After this reform, an overwhelming amount of FDI will come into the country through the automatic route. Only in a few cases which are now on the negative (list) will the FIPB be required," said the FM.

The steps were announced two days after Reserve Bank of India (RBI) governor Raghuram Rajan said he would not opt for a second term at the central bank and experts said they helped boost sentiment. The government said Monday's meeting convened by PM Narendra Modi was pre-scheduled.

The NDA government has accelerated the pace of reforms in the past few months and has secured the passage of key bills such as the Insolvency and Bankruptcy code. The objective is to make India an attractive destination and significantly improve the ease of doing business in the country.

"The criteria we have followed is that in all such sectors where a ministerial permission, or a licence from another governmental authority is required, FDI can be placed on the automatic route," the FM said.

"The government has clearly demonstrated its intention that the reform process will go on. The Indian economy will continue to be on the upward path over the next few years," Jaitely said.

Prime Minister Narendra Modi said the FDI reforms will help create jobs and benefit the overall economy.

"Today's FDI reforms will give a boost to employment, job creation & benefit the economy," Modi said on micro blogging site Twitter. He said the amendments in FDI policy has been done to promote ease of doing business. "India now the most open economy in the world for FDI; most sectors under automatic approval route," Modi said.

Jaitley said the idea behind the liberalisation was to move to a simpler regime. "It has got reduced and only in very few cases which are now on the kind of a negative list is the FIPB required," he said when asked whether the FIPB will be phased out eventually or not.

"Where permission from other agencies is required, whether it is the ministry of defence or the ministry of I&B or the home affairs, in that case we can allow FDI to come in through the automatic route because it still has to go through another governmental permission," said Jaitley.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

Partners
Loading...