The Foreign Investment Promotion Board (FIPB), which vets and approves foreign direct investment (FDI) proposals not cleared through the automatic route, will be abolished in 2017-18, Finance Minister Arun Jaitley has announced while presenting the Union Budget 2017-18 on Wednesday Feb 01,2017
“A roadmap for the same (abolition of FIPB) will be announced in the next few months. In the meantime, further liberalisation of the FDI policy is under consideration and necessary announcements will be made in due course,” Jaitley said.
The Finance Minister, however, did not clarify the alternative mechanism for routing FDI proposals in case they did not qualify for automatic clearance. One option, he said, could be the designated Ministries and Departments handling the proposals.
“The concerned ministry dealing with it is one alternative,” Jaitley said. The government would carry out the proposal in the course of the year and all options would be looked at, he said.
There will also be further liberalisation of the FDI policy and necessary announcements will be made in due course, the Finance Minister said in his Budget speech.
Through two previous tranches of FDI liberalisation, the BJP-led government has already ensured that more than 90 per cent of total FDI inflows are now through the automatic route. The FIPB has also put in place e-filing and online processing of FDI applications. “We have now reached a stage where FIPB can be phased out,” said Jaitley. Finance Ministry officials clarified that existing FDI procedures for defence and sectors that entail national security will be subject to controls
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