After the day of raid at P Chidambaram in an inquiry to determine if the proposal of foreign investment were illicitly cleared by P Chidambaram while he was a Finance Minister, today cabinet met to decide if to dissolve the FIPB or Foreign Investment Proposal Board.
Over two decades ago set up the FIPB has five bureaucrats senior from the different ministries and considers foreign direct investments upto 600 crores, larger the amount need to be sanctioned by a cabinet committee.
While in February cabinet presenting the government’s annual budget, Arun Jaitely the Finance Minister said that in keeping up with the plans to make India an easier place for the business, reforms for foreign direct investment would include abolishing the FIPB, which is a part of the Finance Ministry.
On the road map would announced in the next months or so, for how applications for foreign investment would be handled said by the Finance Minister.
Within in a month the FIPB is likely to be dissolved of the cabinet’s approval. According to the sources the relevant ministries and regulators will be authorised to approve investment proposals. Approval companied seeking may be asked to apply online through a website which is new that would direct their applications to the relevant ministry.
For the FIPB decision to be speed up, starting in 2015, started meeting twice a month by the board.
In any sector the government do not need any approval that would give the foreign stakeholder upto 49% equity, except in areas like defence and mining. In India, about 90% of the FDI or Foreign Direct Investment inflows are through this automatic route. In India FDI touched about Rs 1,45,000 crore in the first half i.e. 6 months of the last fiscal year. As per the Finance Ministry, there is an increase of 36% over the same period for the year before.
According to the case filed by the CBI against P Chidambaram son’s Karti Chidambaram, facilitated the violation of foreign investment laws by a media company owned by Peter and Indrani Mukerjea, who is now in jail for allegedly murdering her daughter. While the FIPB allowed the firm to bring in foreign investment worth four crores, a total of 305 crores was actually imported, the case says.