In another decision, the Cabinet also approved the sugar policy for 2017-18, fixing a fair and remunerative price of sugar at Rs 255 per quintal, which is an increase of 10.6 per cent over the previous year.
Days after the CBI raided the home of former finance minister P Chidambaram and his son Karti to probe their role in Foreign Investment Promotion Board (FIPB) approval for INX Media, the Union Cabinet here on Wednesday approved phasing out of the board.
In another decision, the Cabinet also approved the sugar policy for 2017-18, fixing a fair and remunerative price of sugar at Rs 255 per quintal, which is an increase of 10.6 per cent over the previous year. It also decided to allow use of 2.5 per cent of money collected under the Central Road Fund Act for development and maintenance of waterways.
The Cabinet also approved a 29.7-km metro rail corridor from Noida to Greater Noida costing Rs 4,403 crore. It will be a fully elevated corridor, Jaitley underlined.
According to the Cabinet proposal, the administrative Ministries/Departments will be allowed to process applications for FDI requiring government approvals in consultation with the Department of Industrial Policy & Promotion.
The Ministry of Commerce will also issue the standard operating procedure (SOP) for processing applications and implementing government decision under the FDI policy.
Union Finance Minister Arun Jaitley, who briefed the media on Cabinet decisions, said the foreign investors will find India a more attractive destination after abolition of the FIPB as it will make it easier to do business here. The move, he said, is in tune with promoting the principle of ‘Maximum Governance and Minimum Government’.
He said the board had become more or less redundant as 91 per cent to 95 per cent of foreign investments in the last three years came through automatic route and prior approval was needed only for a few sectors. The mechanism of the board for just 5 to 9 per cent FDI proposals was felt unnecessary and rather time consuming.
In some cases involving security issues, an additional approval of the home ministry will be required. The foreign investment proposals exceeding Rs 3,000 crore will continue to go to CCEA headed by the Prime Minister, Jaitley said.
Jaitley had already indicated abolition of the board in his budget speech, he said, pointing out that all that has been done is to disband a panel of the five secretaries of different ministries constituting the board while representatives of the concerned ministry or department will now decide independently instead of bringing its study of every proposal before the board for a final decision.
Housed in the Department of Economic Affairs, the FIPB was initially constituted under the Prime Minister’s Office (PMO) in the wake of economic liberalisation drive in 1990s by the then Finance Minister Yashwant Sinha. The FIPB has five senior bureaucrats from different ministries and handles foreign direct investments up to Rs 600 crore (larger amounts need to be sanctioned by a cabinet committee).
- Fair price for sugarcane hiked by Rs 255 per quintal. The move will benefit five crore farmers.
- Govt to partially fund the Noida-Greater Noida metro rail corridor being built on the outskirts of Delhi.