Montek Denies Fdi Package

Finance secretary Montek Singh Ahluwalia yesterday denied that the government has worked out a package of measures for attracting foreign direct investment (FDI).

However, the industry ministry is collating information from various ministries aimed at removing procedural hassels for foreign investors.

Ahluwalia said, "There is no package of measures for foreign direct investments, all issues in the ministries are under examination and as and when they are ready, it will be put out."

He admitted that the government is working on plans to remove procedural hurdles and is working towards creating an environment conducive to foreign investment. "The government is working towards implementing the policy objectives laid down in the Budget," the finance secretary said, adding, "Volume of (FIPB) proposals is not important in ascertaining FDI."

Still, government sources said it is keen to send positive signals to foreign investors, but no new measures have been formalised as yet.

"Everything is just a thought process in the industry ministry and no formal note has been prepared," the sources said.

But the industry ministry confirmed that it definitely is collating inputs from various ministries on the areas which need to be looked into and how the rough terrain can be smoothened out to attract FDI. It is also examining the possibility of expanding the list of automatic approvals.

"Some sectors which do not get covered by the automatic approval list would be brought into it and other would get enhanced to other catregories," the sources said.

In this connection, scientific areas have been suggested where in ceratin areas 100 per cent subsidiaries should be allowed.

For example, it is being felt that in sectors like bulk grain movement foreign investment needs to be promoted. "Then there are sectors in high technology which can be further liberalised to attract FDI," government sources said, adding, "The idea is not only to see technology comes to India, but also exploitation of the existing resources of the country."

It has been pointed out that the software sector is one which needs to be promoted and the industry's problems should be attended to aggressively. The industry ministry had asked the urban development ministry to see what effect FIIs involvement in real estate would have. "We do not want the FIIs to get involved in real estate and fail to arrest the price rise in real estate as has happened in Thailand, for example."

Though post-sanctions there have not been any apparent effect on FDI proposals, sources said the number of applications at FIPB had slowed down since the general elections were announced. "If before polls FIPB received 100 proposals per week, now it has come down to about 75 per week," the sources added.

Government sources said that the industry ministry will also attempt an analysis of various bottlnecks in the inflow of FDI and the trends being the administrative ministry.