 "Govt working on simpler FDI policy document")
The government is believed to be trying to make a more reader-friendly, less obtuse, policy on foreign direct investment (FDI).
The department of industrial policy and promotion (DIPP), under the ministry of commerce and industry, is learnt to have had a series of meetings with stakeholders on the matter. It is expected to soon convene a meeting with departments in other ministers for feedback in making the policy more lucid.
"The plan is to make it simpler, so that an international investor does not have to read pages after pages. We believe there is a lot of scope for improvement of the document," a senior official told Business Standard. Adding that it was a long-drawn process but would translate to more of FDI inflow.
DIPP is also seeking to define sectors in a more cogent manner.
In 2010, the then government introduced a Consolidated FDI Policy, with six-monthly revisions subsuming the erstwhile 177 press notes, press releases and clarifications issued by DIPP, thereby changing these into one policy document. The present effort is to make it more cogent, removing the jargon, without disturbing the legal framework.
"This simplification is definitely required. The compendium we have today is not only complex but does not lay out the provisions clearly, which is why the investors come to us," said Harish H V, partner at Grant Thornton India LLP.
"Beside, the government should start the practice of facilitating like they have in other countries. There is just no scope for self-reading now," Harish said.
The new document, he said, should have pointers in terms of linkages, with step by step instructions in terms of all the departments or ministries where an investor needs to seek permission.
"The policy is ambiguous, it has interpretation issues and partly it has lots of gaps and loopholes. But, it is also imperative that the government relax the norms in some of the key sectors," said Punit Shah, partner, Dhruv Advisors.
FDI inflow during January-June this year was $19.4 billion (close to Rs 1.3 lakh crore), up 30 per cent from the nearly $15 bn in the corresponding period of 2014.
