Tribune News Service
New Delhi, November 10
The government today announced bold reforms to liberalise foreign direct investment (FDI) across 15 sectors, including civil aviation, banking and defence, sending a clear message to investors that the economic agenda is on track and has not been dissipated by the BJP-led NDA’s Bihar debacle.
The announcement cameon the eve of Prime Minister Narendra Modi’s visit to the UK and the G20 summit in Turkey. Modi also buttressed the message on continuing reforms on Twitter.
The Prime Minister said the decision to ease FDI norms in 15 sectors demonstrates the government's “unequivocal and unwavering” commitment to development and reforms whose fruits should reach every citizen and every part of India.
He said the country was “unstoppable” on the path of economic progress and the government wanted the world to see the tremendous opportunities India offered.
The government relaxed foreign investment rules in 15 sectors such as civil aviation, banking, defence, retail and news broadcasting. It also eased the process for approval of FDI.
While 100 per cent FDI has been allowed in DTH, cable network and plantation crop, overseas investment limit in uplinking of news and current affairs TV channels has been raised to 49 per cent from 26 per cent. The government relaxed conditions for FDI in single-brand retail and allowed 100 per cent FDI under automatic route in duty-free shops and limited liability partnerships and eased foreign investment norms in the defence sector.
DIPP Secretary Amitabh Kant said: “This is Diwali gift for investors. This is the biggest bang reform of the government.”
Explaining the rationale for the FDI boost, the Industry Ministry said it would boost investments and create more jobs. “However, the commitments to the millions of youth of the country to provide them remunerative employment or entrepreneurial opportunities is not yet fully realized”, it said. The aim of these reforms is to further ease, rationalise and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of government route where time and energy of the investors is wasted.
The policy aims at opening up the manufacturing sector for wholesale, retail and e-commerce so that the industries are motivated to make in India and sell it to the customers here instead of importing from other countries. The proposed reforms also enhance the limit of Foreign Investment Promotion Board (FIPB) from current Rs 3,000 crore to Rs 5,000 crore.
“With this round of reforms, the government has demonstrated that India is unstoppable on the path of economic development. The Prime Minister has reiterated that economic wellbeing of the people of India is the main task before him”, the government statement said.
Along with sectoral reforms, the Department of Industrial Policy and Promotion (DIPP) will also consolidate all FDI-related instructions contained in various notifications and press notes and prepare a booklet so that the investors don't have to refer to several documents of different timeframes.
Terming the FDI reforms announced today, as being “among the most-sweeping and forward-looking,” Sumit Mazumder, CII President, said: “This is an emphatic message from the government that the reforms process is on track and we can expect more of such bold moves in the times to come”.
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