Government puts protocol in place to speed up FDI

Government puts protocol in place to speed up FDI

New Delhi, Jun 4: Having decided to turn down frivolous concerns raised by investigative agencies, the government has put in place a detailed protocol for clearing all foreign direct investment (FDI) proposals as part of an exercise to speed up approvals and bring about greater transparency.
Sources said that a panel of secretaries has put in place norms for all allegations related to security, corruption, directors, tax cases, money laundering and round-tripping of funds, environment, and accidents. While specific inputs related to any of the issues will be probed, the protocol will detail how to deal with all other observations related to companies, their parents or subsidiaries as well as directors.
Although over 95% of FDI proposals are now on the automatic route, those related to sectors such as defence, aviation, telecom and I&B need clearance from the ministries concerned after the Centre decided to wind up the Foreign Investment Promotion Board (FIPB) last year.
On May 3, it was reported that the home ministry had been asked to ensure that low-ranking personnel do not hold up investment proposals by flagging unsubstantiated concerns. Two days later, the ministry responded by saying that it had granted security clearance to over 4,600 FDI proposals during the four years of the Modi government and cut the average processing time to 50 days from four months.
Several FDI proposals had been delayed despite the 60-day deadline put in place at the time of FIPB abolition. With the panel of secretaries now formulating what is being called as the “security protocol”, at least seven high-profile cases that were held up due to concerns expressed by the home ministry are now on path to resolution.