De­ci­sion on rlys, de­fence FDI soon

The Political and Business Daily - - FRONT PAGE -

The Govern­ment may soon take a de­ci­sion on eas­ing FDI in Rail­ways and De­fence sec­tors, with the DIPP await­ing fi­nal com­ments from the con­cerned min­istries to put these pro­pos­als for con­sid­er­a­tion of the Cabi­net.

"The CCEA has ap­proved the 49 pc FDI in in­sur­ance and the Cabi­net notes for Rail­ways, De­fence are un­der the fi­nal con­sul­ta­tive process. Once we get the fi­nal com­ments, we will put them up to the Cabi­net for ap­proval shortly," DIPP Sec­re­tary Amitabh Kant said.

THE govern­ment may soon take a de­ci­sion on eas­ing FDI in Rail­ways and De­fence sec­tors, with the De­part­ment of In­dus­trial Pol­icy and Pro­mo­tion await­ing fi­nal com­ments from the con­cerned min­istries to put these pro­pos­als for con­sid­er­a­tion of the Union Cabi­net.

"The CCEA has ap­proved the 49% FDI in in­sur­ance and the Cabi­net notes for Rail­ways, De­fence are un­der the fi­nal con­sul­ta­tive process. Once we get the fi­nal com­ments, we will put them up to the Cabi­net for ap­proval shortly," DIPP Sec­re­tary Amitabh Kant said on the side­lines of the CIIIn­vest North Sum­mit here to­day.

The govern­ment pro­poses to hike the for­eign di­rect in­vest­ment (FDI) ceil­ing in the sen­si­tive de­fence sec­tor to 49% from 26%, en­sur­ing con­trol in In­dian hands, for boost­ing do­mes­tic in­dus­try of a coun­try which im­ports up to 70% of its mil­i­tary hard­ware.

Be­sides, it also plans to ease FDI norms for the cash-starved Rail­ways. The De­part­ment of In­dus­trial Pol­icy and Pro­mo­tion (DIPP) has pro­posed per­mit­ting 100% FDI in ar­eas such as high-speed train sys­tems, sub­ur­ban cor­ri­dors and ded­i­cated freight line projects im­ple­mented un­der PPP mode.

The FDI lib­er­al­i­sa­tion in the sec­tor would help in mod­erni­sa­tion and ex­pan­sion of the Rail­ways.

Ac­cord­ing to es­ti­mates, the sec­tor is fac­ing a cashcrunch of around Rs 26,000 crore. How­ever, FDI is not pro­posed to be al­lowed in train op­er­a­tions and safety.

At present, there is a com­plete re­stric­tion on any kind of FDI in the Rail­ways sec­tor ex­cept mass rapid trans­port sys­tems. The move will also help in devel­op­ment of its in­fra­struc­ture for in­dus­trial pur­poses.

Asked about the sta­tus of FDI in Con­struc­tion sec­tor, Kant said : "That is also at a fairly ad­vanced stage now. The fi­nal process of in­ter­ac­tion is on".

In Novem­ber last year, the pro­posal of the DIPP to re­lax FDI norms in the sec­tor was dis­cussed at the Cabi­net meet­ing but was de­ferred due to con­cerns be­ing raised by the Ur­ban Devel­op­ment Min­istry on few norms.

The DIPP has pro­posed easy con­di­tions for exit for de­vel­op­ers be­fore the three-year lock-in pe­riod and a change in the cur­rent re­quire­ment of hav­ing a min­i­mum built-up area for FDI in con­struc­tion devel­op­ment projects.

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