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February 27, 1999
Foreign Investment Implementation Authority to clear FDI proposals faster
The government has decided to create the Foreign Investment Implementation Authority within the ministry of industry to ensure that foreign direct investment approvals are quickly translated into investment flows and projects.
Presenting the Budget for 1999-2000 today, Finance Minister Yashwant Sinha said that there had been complaints about slow implementation of FDI approvals and indicated that the newly-created FIIA could also include representatives of state governments.
In order to make inflows of FDI hassle-free, the government has also decided to expand the list of automatic approvals covering important industrial and services sectors.
The expanded list will be announced separately by the minister of industry. Wherever FIPB clearance is required, it will henceforth give the decision within 30 days.
In order to strengthen the participation of non-resident Indians in the development of the country, some more initiatives have been proposed.
The facility of automatic approval for investment up to 100 per cent by NRIs/ overseas corporate bodies will be extended for all items, except those which attract notified FDI equity caps, or compulsory licensing or public reservation under the industrial policy or are reserved for the small scale sector.
The existing RBI approval mechanism for NRI investment in the Indian mutual funds will be simplified to a post-facto reporting mechanism.
The finance minister said that he had also asked the Securities and Exchange Board of India to work out the modalities for enabling the country's major stock exchanges to open trading terminals abroad, which would facilitate the participation of NRIs in the capital markets. This is now technically possible as India's major stock exchanges today have screen-based automated trading in securities.
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