Cabinet Fails To Consider Plan To Relax Fdi Norms

The industry ministry's plans to unveil a surprise package at the much-touted 'Destination India""Global Summit' came unstuck with the Union cabinet failing to take up for discussion the ministry's proposal to free foreign direct investment (FDI) norms at its late night meeting on Monday.

Sources said though only a few proposals were listed for the cabinet's consideration, the proposal on FDI liberalisation was not taken up for discussion even though the meeting went on for nearly two hours.

The proposal will now be taken to the cabinet only at a later date since there is no hurry to get it through now.

 

The industry ministry had been counting on cabinet clearance of its proposal so that it could have something concrete to announce at the summit where it would be making a strong pitch for foreign investment.

The two-day summit has been organised jointly by Ficci and the industry ministry and is being promoted by the Deve Gowda government as the first promotional initiative of the newly constituted Foreign Investment Promotion Board under the United Front government.

Sources said that since Parliament was in session, the government was bound by convention that no policy announcements could be made outside the two Houses.

Industry ministry sources said that at the same time, the government could have at least made some token statement on the new policy on anvil.

The industry ministry is proposing to further liberalise FDI norms at several levels. While it is proposing to raise the automatic clearance limits from 51 to 74 per cent in the 35 sectors identified by the government in its Industrial Policy of 1991, it is also planning to substantially broaden the list of industries in which automatic clearances will be permitted.

This list includes mining, surface transport, navigations, storage and warehousing services, capital goods, basic industries, food processing, intermediate, tertiary and mining sectors.