The Modi Cabinet has approved phasing out of the Foreign Investment Promotion Board (FIPB), in yet another step towards improving the ease-of-doing business in the country, and pushing ahead with economic reforms. Administrative ministries and departments will now process applications for FDI proposals which require government approval.
“Foreign investors will find India as more attractive destination and this will result in more inflow of FDI. The move will provide ease-of-doing business and will help in promoting the principle of maximum governance and minimum government,” a statement said. The Department of Industrial Policy and Promotion under the Commerce Ministry will issue the standard operating procedure for processing applications. FIPB was set up back in 1991, along with industrial de-licensing, at a time when FDI in most sectors required government approval and the Prime Minister's Office directly oversaw the process. Currently, applications are considered by the FIPB, and after the cabinet decision, it would be hand led independently by the administrative ministries handling particular sector for which foreign investment proposals are made.
Economic Affairs secretary Shaktikanta Das said, “The idea is to move towards more opening up and to have more and more process-driven activities and methods. In fact, today nobody visits North Block for FIPB clearance because everything is online. The application is online, the clarifications, if any, are online, consultations with ministries are also done online.”
