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Govt plans big-bang FDI push

Partha Ghosh in New Delhi

The government will take up for consideration a big bang package of proposals to increase the foreign investment ceiling on several sectors as well as relaxation of pre-conditions on several others, after the winter session of Parliament ends on December 20.

The proposals include relaxation of norms in drug (recombinant DNA) manufacturing, oil marketing, small-scale manufacturing, petroleum refining, mining and exploration, airports, ISP, total bandwidth and gateway, and to some extent, financial services.

There is, however, reservations about increasing the ceiling in three key sectors-civil aviation, telecom services and insurance --, said sources in the government.

A top industry ministry official confirmed that recommendations from the different administrative ministries have been received, and they have been collated by the department of industrial policy and promotion in the commerce and industry ministry.

The official told Business Standard that a note has been prepared for the consideration of the group of ministers on FDI.

"We have sought time from the ministers. We hope a meeting can take place after the end of the parliament session," he said.

Once the set of proposals is cleared by the GoM, it will be put up before the union cabinet for its consideration.

The GoM on FDI is headed by the union finance minister, and constitutes five other ministers of cabinet rank and the minister of state for small-scale industry. These ministers are now busy with the business of the House and are likely to be free next week.

A source said that the proposals may come up for consideration by the GoM as early as next week, since some of the members of the GoM and senior government functionaries may be on leave on the eve of the new year.

Proposals to open up several sectors further has been pending for three months now, after the steering committee of the Planning Commission headed by NK Singh gave its recommendations.

In fact, proposals for increasing the FDI limit in three key sectors-civil aviation, insurance and telecom services-had been discussed at a Cabinet meeting then.

But the Cabinet called for a larger consensus, and asked all concerned ministries to send in their views. "The ministries have discussed not only the NK Singh Committee Report, but also similar recommendations by the consultants such as Mckinsey and Boston Consultancy group, and the apex industry chambers," the source said.

He, however, declined to give any targets for the next year, after the new proposals are implemented.

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