New Delhi : It is back to governance for the NDA government after the poll drubbing in Bihar. The empathetic message emanated on Tuesday from the announcement of reforms in 15 major sectors, mostly involving relaxation of Foreign Direct Investment (FDI). To begin with, FDI up to 49 per cent will now be allowed in the Defence sector under the automatic route. Currently, FDI up to 49 per cent is allowed but under the government approval route. There will be 100 per cent FDI in sectors such as completed construction projects. The govern-ment has also removed restrictions on minimum floor area or minimum capitalisation. In the broadcast sector, FDI limit in news channels has been hiked from 26 per cent to 49 per cent. In the non-news category, FDI up to 100 per cent has been allowed without the government’s approval. The FDI limit in DTH (direct-to-home) and cable networks has been increased to 100 per cent. Earlier, the limit was 74 per cent in DTH services. The government has also opened plantation activities in coffee, rubber, cardamom, palm oil tree and olive oil tree to 100 per cent FDI. Right now, only tea plantations are open to foreign investment.
Single-brand retail firms also have been allowed to sell products through e-commerce, subject to government approval. Manufacturers have been permitted to sell their products through wholesale/ retail — including through e-commerce. Also, a single entity has also been allowed to carry out business in wholesale/cash & carry and single-brand retail. There will also be 100% FDI in duty-free shops. For private banks, the government has removed the distinction between different categories of foreign investment. Accordingly, foreign institutional investors, foreign portfolio investors and qualified foreign investors can now invest up to 74 per cent in the sector. Regional air transport service will now be eligible for foreign investment up to 49 per cent under automatic route. The FDI cap in non-scheduled air transport service and ground handling services has been increased to 100 per cent from 74 per cent.
The government has also eased norms related to investment by companies owned and controlled by Non-Resident Indians. Rules of establishment and transfer of ownership and control of Indian companies have also been relaxed. The government has also increased the financial power of the Foreign Investment Promotion Board to give single window clearance for investment projects up to 50 billion rupees from 30 billion rupees. The multipronged thrust to FDI also serves to drive home the message that the Modi government is back on track on its well-publicised development and economic agenda. The announcement of reforms came on the eve of Diwali and barely two days before Prime Minister Narendra Modi embarks upon his first visit to the U.K. “With this round of reforms, the government has demonstrated that India is unstoppable on the path of economic development,” an official statement said.
