<div><strong>BW Online Bureau</strong><br><br>As Union Finance Minister Arun Jaitley had said that the pace of economic reforms won’t be affected by the Bihar rout, the Narendra Modi government on Tuesday (10 November) announced foreign direct investment (FDI) in as many as 15 sectors.<br><br><div>Govt's commitment to development and reforms is unequivocal and unwavering, said Prime Minister Narendra Modi.</div><div> </div><div>Saying "today's reforms are another example of emphasis on Minimum Govt, Maximum Governance, Modi said India is unstoppable on path of economic progress. Govt wants the world to see the tremendous opportunities India has to offer. </div><div> </div><div>"These decisions come into force with immediate effect," Economic Affairs Secretary Shaktikanta Das said.</div><div> </div><div>DIPP Secretary Amitabh Kant said: "This is Diwali gift for investors. This is the biggest bang reform of the government." </div><div> </div><div><div>“The Government’s comprehensive announcement today on easing FDI norms in 15 major sectors of the economy is one of the boldest reform moves yet, even from this government and as CII, we congratulate the government and wholeheartedly welcome this initiative. This is a clear and strong message that reforms are not only on track but are going to be aggressive. For the markets and for industry, there could not have been a better Diwali gift,” said Chandrajit Banerjee, Director General, CII.</div></div></div><div> </div><div><strong>Simplifying Foreign Investment</strong><br>A government release said: “The crux of these reforms is to further ease, rationalise and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of Government route where time and energy of the investors is wasted”. </div><div> </div><div>The sectors to benefit by the FDI push include agriculture and animal husbandry, mining, defence, broadcasting, construction development sector, and manufacturing sector.</div><div> </div><div>The FDI push comes ahead of PM Modi’s visit to the UK, and Turkey where he will attend the G 20 conference.</div><div> </div><div>“It is one more proof of minimum government and maximum governance. Further refining of foreign investments in key Sectors like Construction where 50 million houses for poor are to be built. Opening up the manufacturing Sector for wholesale, retail and E-Commerce so that the Industries are motivated to Make in India and sell it to the customers here instead of importing from other countries. The proposed reforms also enhance the limit of Foreign Investment Promotion Board (FIPB) from current Rupees 3000 crores to 5000 crores,” the government release added.</div><div> </div><div>Along with these sectoral reforms, DIPP has also been advised to consolidate all FDI related instructions contained in various notifications and press notes and prepare a booklet so that the investors don't have to refer to several documents of different timeframes. This exercise is intended on the one hand to further open up the Sectors for more foreign investments in the country and also to make it easy to invest in India. In the normal course, the policy corrections in 16 areas would have taken at least one year to process and get approvals. Thus, this action is a very dynamic step in terms of integrating the Indian Economy with the rest of the World for attracting investments and technology and generating employment for enhancement of income of the people of India. </div><div> </div><div><strong>FDI In Single-brand Retail</strong><br>The government relaxed conditions for FDI in single-brand retail and allowed 100 per cent FDI under automatic route in duty-free shops and Limited Liability Partnerships (LLP) and eased foreign investment norms in the defence sector.</div><div> </div><div>It has also raised the FIPB's monetary limit to Rs 5,000 crore from Rs 3,000 crore for approving FDI proposals.</div><div> </div><div>In the construction development sector, minimum capitalisation norms and floor area restrictions have been removed. The government has also eased exit norms for foreign players in the sector.</div><div> </div><div>"Hundred per cent FDI under automatic route has been allowed in completed projects for operation and management of townships, malls/shopping complexes and business centres," the commerce and industry ministry said in a statement.</div><div> </div><div>In the defence sector, 49 per cent foreign investment has been allowed under the automatic route and anything beyond through the Foreign Investment Promotion Board (FIPB) nod.</div><div> </div><div>Earlier, the investors were required to take approval of Cabinet Committee on Security for foreign investment above 49 per cent.</div><div> </div><div>"Portfolio investment and investment by Foreign Venture Capital Investor (FVCIs) will be allowed up to permitted automatic route level of 49 per cent," it clarified.</div><div> </div><div>In case of infusion of fresh foreign investment within the permitted automatic route level, resulting in a change in the ownership pattern or transfer of stake by existing investor to new foreign investor, government approval will be required." </div><div> </div><div>In the broadcasting sector, 100 per cent FDI has been allowed in DTH, teleports, mobile TV and cable networks. Of this, 49 per cent will be allowed under automatic route and beyond that will need FIPB nod.</div><div> </div><div>In the case of terrestrial broadcasting FM (FM radio) and uplinking of news and current affairs' TV channels, the foreign investment limit has been raised from 26 per cent to 49 per cent under the approval route.</div><div> </div><div>As for the up-linking of non-news and current affairs' TV channels, 100 per cent FDI has been now permitted under the automatic route. Earlier, it was allowed under the government approval route.</div><div> </div><div>In the private banking sector, the government has introduced full fungibility of foreign investment and accordingly, "FIIs/FPIs/QFIs, following due procedure, can now invest up to sectoral limit of 74 per cent, provided there is no change of control and management of the investee company".</div><div> </div><div>Earlier, portfolio investment was permitted up to 49 per cent.</div><div> </div><div>It may be mentioned, India is the fastest growing economy among major nations. The World Bank has improved India's ranking by 12 places in the 2016 Study of Ease of Doing Business. FDI has gone up by 40 per cent. Several global institutions have projected India as the leading destination for FDI in the World. IMF has branded India as the brightest spot in the Global Economy whereas the World Bank projects India's growth at 7.5 per cent and even better.</div><div> </div><div><strong> The salient measures are:</strong></div><div> Limited Liability Partnerships, downstream investment and approval conditions.</div><div> Investment by companies owned and controlled by Non-Resident Indians (NRIs)</div><div> Establishment and transfer of ownership and control of Indian companies</div><div> Agriculture and Animal Husbandry</div><div> Plantation</div><div> Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities</div><div> Defence</div><div>Broadcasting Sector</div><div>Civil Aviation</div><div>Increase of sectoral cap</div><div>Construction development sector</div><div>Cash and Carry Wholesale Trading / Wholesale Trading (including sourcing from MSEs)</div><div>Single Brand Retail Trading and Duty free shops</div><div>Banking-Private Sector; and Manufacturing Sector</div><div> </div>
