PM push for

PM to re­view pol­icy, con­sider putting FDI clear­ances for ex­ist­ing units on au­to­matic route

Hindustan Times (Patna) - - FRONT PAGE - Saub­hadra Chat­terji

NEW DELHI: Keen on re­mov­ing the hur­dles in the way of for­eign in­vest­ments and in­fus­ing fresh cap­i­tal in the coun­try's econ­omy, Prime Min­is­ter Man­mo­han Singh will hold a key meet­ing on Thurs­day evening to re­view FDI pol­icy in the phar­ma­ceu­ti­cal sec­tor. The meet­ing may take a call on putting FDI clear­ances in ex­ist­ing domestic phar­ma­ceu­ti­cals (Brown­field) units on the au­to­matic route, speed­ing up the in­vest­ment process con­sid­er­ably. Cur­rently, overseas in­vestors need to ob­tain clear­ances from the For­eign In­vest­ment Pro­mo­tion Board (FIPB) to ac­quire Brown­field projects. Only in­vest­ments in new (Green­field) projects en­joy ap­proval through the au­to­matic route, which only re­quires clear­ances from the Re­serve Bank of In­dia and SEBI.

The meet­ing will be at­tended by fi­nance min­is­ter P Chi­dambaram and com­merce & in­dus­try min­is­ter Anand Sharma, among oth­ers.

The In­dian pharma sec­tores­ti­mated at al­most R1 lakh crore- al­lows 100% FDI for both Brown­field and Green­field projects. “But there is a need to loosen the red tape and ex­pe­dite the process of in­vest­ment in­flow. A de­ci­sion can be ex­pected at Thurs­day’s meet­ing,” said a top government of­fi­cial.

The meet­ing on FDI in pharma sec­tor comes close on the heels of the government's bold de­ci­sion to open up the multi­brand re­tail sec­tor as well as civil avi­a­tion to for­eign in­vestors. In Septem­ber, the Union cab­i­net al­lowed up to 49% for­eign cap­i­tal in domestic air­lines and 51% FDI in multi-brand re­tail. The sec­ond de­ci­sion has come un­der fierce crit­i­cism from a larger sec­tion of the op­po­si­tion, and even al­lies.

In Oc­to­ber 2011, the UPA government had put FDI in Brown­field pharma in­dus­trieswhich ear­lier en­joyed au­to­matic clear­ance-on the FIPB ap­proval route.

Ac­cord­ing to sources, the fi­nance min­istry wants FIPB route only in cases of FDI be­yond 49% in Brown­field projects. Com­merce min­istry, how­ever, wants a blan­ket FIPB ap­proval for any in­vest­ment in ex­ist­ing pharma units.

Un­der the new rules, the for­eign in­vestor has to seek the per­mis­sion of the FIPB, and get the pro­posal vet­ted by mo­nop­oly watch­dog Com­pe­ti­tion Com­mis­sion of In­dia (CCI). The PM's meet­ing is also likely to re­de­fine the role of CCI for such trans­ac­tions.

Man­mo­han Singh

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