<div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><span style="font-size: 12.8000001907349px;">Finance Minister Arun Jaitley on Thursday (16 July) announced that the Cabinet has cleared policy for composite cap on foreign investments, which would “club together” foreign direct investment (FDI), foreign portfolio investment and investments by non-resident Indians.</span></div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);">Composite caps have been suggested for sectors like agriculture, tea plantations, petroleum and natural gas, manufacturing, airports, real estate, telecommunications, mining, non-banking financial companies and pharmaceuticals.</div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);">In some sectors where only FDI and FII investments are allowed now, the department of industrial policy and promotion (DIPP) has proposed investments by non-resident Indians and foreign venture capital firms as well. These include up to 100 per cent foreign investment in asset reconstruction companies, 74 per cent in private banking, 20 per cent in public-sector banks and 49 per cent in power exchanges.</div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><div>However, individual FDI and FII limits would continue in two key sectors, banking and defence, a government official said, even as some bankers claimed they might also benefit.</div><div> </div><div><span style="font-size: 12.8000001907349px;">Stating that the concept of composite caps has been introduced for simplification of foreign investment norms, Jaitley said, "From now onwards, all FIIs, NRIs and other foreign investments will be clubbed.</span></div><div> </div><div>"It will be constituted as a composite cap," Jaitley told reporters after the Cabinet meeting chaired by Prime Minister Narendra Modi.</div><div> </div><div>A government official said the move will provide options to both foreign and domestic investors, but added that no changes have been made with regard to specific foreign investment norms for the banking and defence sectors.</div><div> </div><div>Foreign investment in banking and defence sectors will continue to have separate caps for FII and FDI, the official added. The limit of portfolio investment in banking is capped at 49 per cent while in defence it is 24 per cent.</div><div> </div><div>Some bankers, including Yes Bank chief Rana Kapoor said the move would help attract more capital flowing into the system and significantly ease the procedural investment decisions by foreign investors.</div><div> </div><div>The official said all existing investments will hold good even if they are not exactly in compliance with the new norms.</div><div> </div><div>In a post-Cabinet statement, the government also said investments made through Foreign Currency Convertible Bonds (FCCBs) and Depository Receipts (DRs) would not be treated as foreign investment unless the debt is converted into equity.</div><div> </div><div>The proposal is aimed at simplification of FDI policy with a view to attracting foreign investments and also improving ease of doing business in India.</div><div> </div><div>Under the existing policy, there are different caps for separate investment categories like FDI, FII and NRIs.</div><div> </div><div>The proposal, mooted by the Commerce and Industry Ministry, would help remove ambiguity on application of sectoral caps, conditions and approval requirements in different sectors and simplify the foreign investment policy.</div><div> </div><div>In 2014-15, investment by foreign institutional investors (FIIs) grew over seven times to USD 40.92 billion. FDI grew 27 per cent to USD 30.93 billion in the previous fiscal.</div></div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);">The Cabinet also gave nod to several key decisions such as redevelopment of railway stations and Eastern Peripheral Highways. </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);">The Cabinet gave its nod for the development of the six-laning of Eastern peripheral expressway in Haryana and Uttar Pradesh. The cost is estimated to be Rs 7,558 crore, including Rs 1,795.20 crore for land acquisition, resettlement and rehabilitation and other pre-construction activities. </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><b>Other key decisions:</b></div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><strong>1)</strong> Inter-state transmission lines with an expenditure of Rs 8,548 crore. As much as Rs 3,419 crore is to come from clean energy fund</div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><strong>2)</strong> Eastern peripheral expressway project to connect Palwal in Uttar Pradesh to Kundli in Haryana</div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><strong>3)</strong> Cabinet approved the second phase of eCourts Mission Mode Project at an estimated cost of Rs 1,670 crore. </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><strong>4) </strong>Extending capital infusion for regional rural banks till 2016-17. As much as Rs 700 crore to be given as additional amount.</div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><strong>5)</strong> Two packages for cyclone affected areas of Rs 2,331 crore and Rs 2,361 cr</div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><strong>6)</strong> Repeal of 295 obsolete laws</div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><strong>7)</strong> Additional foodgrain relief to J&K at above poverty line prices as it was affected by floods</div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"> </div><div style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 12.8000001907349px; background-color: rgb(255, 255, 255);"><strong>8)</strong> Centre to release caste part of scio-economic caste census after getting report from states<br><br>( <em>PTI also contributed to this story</em>) </div>
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