Foreign funding may soon become easier

In the latest push for ease of business in the country, the Union cabinet will allow direct approval of foreign investment proposals by individual ministries.

The proposal, to be cleared by the cabinet on Wednesday, can also speed up the much-needed investment process amid the Narendra Modi government’s desperate push for jobs.

During this year’s budget presentation, finance minister Arun Jaitley had announced that the decades-old Foreign Investment Promotion Board (FIPB), which clears proposals up to ₹5,000 crore, will be scrapped.

India has opened up most sectors in the country to enable foreign companies to set up shop here. This in turn has reduced the utility of the FIPB.

“The Cabinet is likely to take up the proposal of abolishing FIPB at its meeting on Wednesday,” official sources said.

Another source added, the Department of Industrial Policy and Promotion(DIPP) , will act as the nodal body for all foreign investment proposals.

The FIPB was initially constituted under the Prime Minister’s Office in the wake of economic liberalisation in the early 1990s. It covers sectors such as defence and retail trading.

After the abolition of the FIPB, sources said, line ministries will clear FDI proposals.FDI inflows touched a record $60.1 billion in 2016-17. In the last three years, the government has eased 87 FDI rules across 21 sectors to accelerate economic growth and boost jobs.