Seeking to make foreign direct investment (FDI) policy simpler, the government on Wednesday released an updated compendium by incorporating all policy changes and eliminating unnecessary explanations, but retains the United Progressive Alliance ( UPA) regime’s policy on opening of multibrand retail for foreign investment.
Besides other things, the compendium includes provisions for issue of “sweat equity” to non- resident employees and directors and defined the terms private security agencies, private security and armoured car service.
“The FDI policy has been made simpler and investor friendly; facilitating ‘Make In India’ and ease of doing business.
The circular will serve as a ready reference for foreign investors on various provisions of the FDI policy," the Department of Industrial Policy and Promotion ( DIPP) said. It said the 109 page policy has also clarified on private security agencies by borrowing definition of few terms from the Private Security Agencies ( Regulation) ( PSAR) Act, 2005.
Also, DIPP in the consolidated FDI policy has retained the previous UPA regime’s decision allowing foreign retailers to open multi- brand stores with 51 per cent ownership.
The Bharatiya Janata Party( BJP)- led NDA ( National Democratic Alliance) government, which came to power in May 2014, has not made any changes to this policy. However, the BJP had opposed foreign investment in multi- brand retail sector in its election manifesto.
The new compendium, which came into effect from from Tuesday, mentions all the existing FDI policy decisions, as also the changes made since May 12 last year.
These include changes in the FDI norms in over a dozen sectors, including pensions, insurance, asset reconstruction company, e- commerce guidelines, single- brand retail, plantation segment and broadcasting.
An official said the department would prepare a thinner version of the policy mentioning sectors and their FDI caps.
Investors would otherwise have to go through various press notes and RBI regulations to understand the policy. The government updates the policy every year.
FDI in India grew by 29 per cent to $ 40 billion in 2015- 16, against $ 30.93 billion in the previous financial year. Further the compendium also includes provisions made for enabling investments in real estate and infrastructure investments trusts and guidelines for FDI on e- commerce. Non- resident Indians have been made eligible for subscription to National Pension System governed and administered by PFRDA.
Business Standard, New Delhi, 09 June 2016
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