FIPB shelved by Cabinet to boost FDI inflow
DSIJ Intelligence / 25 May 2017
Decisions will be taken by the respective ministries in consultation with Department of Industrial Policy and Promotion while in some cases the references may be made to the home ministry for permission.
The Union cabinet approved on Wednesday the abolition of Foreign Investment Promotion Board (FIPB). This move will reduce the red tape and will enhance the ease of doing business, believes market observers.
As per the new arrangement, going forward, only 11 sectors will need prior approval for foreign investment and decisions.
Decisions will be taken by the respective ministries in consultation with Department of Industrial Policy and Promotion while in some cases the references may be made to the home ministry for permission.
Finance minister, Arun Jaitley, while talking to reporters said that 91-95 per cent of FDI has been coming via the automatic route, thus reducing the need for FIPB.
This step may help ease of doing business as per the finance minister.
The FIPB was initially constituted under the Prime Minister's Office in the wake of the economic liberalisation of the early 1990s.
Arun Jaitley as Finance Minister had proposed abolishing the inter-ministerial body in the Union Budget 2017-18.
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