FIPB comes to an end to facilitate ease of business
The Union cabinet has okayed the abolition of 25-year-old Foreign Investment Promotion Board (FIPB), whose purpose was to vet Foreign Direct Investment (FDI) proposals in India, as most of the FDI money now comes via automatic routes.
Jaitley had first suggested the scrapping of this inter-ministerial body during his budget speech for the 2017-18 session.
Here's all you need to know about it.
FIPB duties will be handled by respective ministries
What was Foreign Investment Promotion Board?
The FIPB was constituted in early 1990s to provide a single window clearance for FDI applications, however, those coming through the automatic method didn't fall under its jurisdiction and were taken care of by sectoral laws.
Its influence was limited to proposals that had foreign equity inflow of and below Rs. 3000 crore, those above were handled by Cabinet Committee on Economic Affairs (CCEA).
Why is it no longer needed ?
Jaitley, while making his case had said, "We have now reached a stage where FIPB can be phased out."
"After liberalization of the FDI regime, about 90% of the foreign investments are coming through the automatic route," FinMin Jaitley added.
This abolition helps to remove an unnecessary layer of decision making for FDI approvals and improve the ease of doing business.
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How things run from now on?
FIPB's 11 sectors, which include defense and retail trading, would now be manned by the respective ministries; they will adhere according to guidelines and clear the proposals.
This move will facilitate capital inflows in the country and bolster the economy.
FinMin Jaitley also informed, "In some cases where there are security concerns, home ministry's clearances will be required."
GST will not be postponed
FinMin Jaitley said that July 1 will be the date, when GST will be rolled out and there will be no more delays of any sort.
"GST, that was earlier considered a mere slogan and tough to implement, is an idea that has been around for 10-15 years since the Vajpayee government. But (we have managed) to build a consensus with all the states..."