'Government to ease more FDI restrictions'

Won't necessarily wait for budget before these and additional reforms, says Das; aim is to address structural issues

The government is planning to remove some conditions and restrictions in its policy on foreign direct investment (FDI), to attract more of it, Economic Affairs Secretary Shaktikanta Das said on Wednesday.

"The next area we are looking at is with regard to FDI reforms. New sectors have been opened up and sectoral caps have been liberalised but there is a lot more to do," he said at an event organised by business chamber Assocham.

FDI policy has various conditionalities and restrictions, he said. "The effort is to make FDI policy simple and progressive. I won't be able to spell out details because it is work in progress."

This government has relaxed FDI policy norms in the defence, insurance, construction, medical devices and railway sectors. Its 'Make In India' drive is aimed at making the country a global investment hub.

Das said the government would continue with measures to make India an attractive investment destination, without necessarily waiting for new announcements in the annual budgets. He reiterated an earlier forecast that growth in this financial year would exceed 7.5 per cent. In the June quarter, the economy grew at seven per cent.

"Policy initiatives are round the clock, a 24x7 exercise, and it will continue," Das said.

"The direction of these reforms and administrative measures is to strengthen the initiative towards Make in India and, second, to ensure revival of demand by giving a boost to more and more investment," he added.

On the latter, he said: "Obviously, we cannot resort to fiscal expansionary measures which were initiated five-six years ago when the financial crisis hit the world market...we don't have the fiscal room to adopt (such) expansionary policies because beyond a point, it produces negative consequences."

Initiatives have to be much more structural and will have to address basic issues, he stressed. "So, as part of demand revival, the emphasis of the government is to promote investment and facilitate more and more (of it) coming into India."

On start-ups that shift base out of the country due to procedural issues after a few years, Das said an enabling framework is in the works. "It will be spelt out as and when the government takes a decision."

On the oft-debated good and services tax (GST): "The government is committed to a stable and simple taxation regime which has certainty...the pace of reforms will continue in taxation. GST is very much on the table. The government is committed to introducing (it) at the earliest possible."

Das also emphasised the need for giving a boost to domestic savings. "This has been an area of challenge for two-three years. Our overall domestic savings have come down." The decision to launch the gold bond and gold monetisation schemes was a step in this direction, he said.