Prime Minister Narendra Modi-led Cabinet today approved a slew of proposals aimed at encouraging foreign investment in the country and also reviving the stalled construction projects. The idea of promoting investment and de-stressing the construction sector is to aim for higher growth and employment. We take a look at some of the key decisions that were taken:
1) Permanent residency status to foreign investors: In a bid to encourage foreign investment, the Cabinet has approved this scheme for granting permanent residency status (PRS) to foreign investors subject to relevant conditions being met. These will be specified in the FDI Policy notified by the government from time to time.
“The PRS will be granted for a period of 10 years with multiple entry. This can be reviewed for another 10 years if the PRS holder has not come to adverse notice. The scheme will be applicable only to foreign investors fulfilling the prescribed eligibility conditions, his/her spouse and dependents. In order to avail this scheme, the foreign investor will have to invest a minimum of Rs 10 crore to be brought within 18 months or Rs 25 crore to be brought within 36 months. Further, the foreign investment should result in generating employment to at least 20 resident Indians every financial year,” the Cabinet release said.
PRS holders will be allowed to purchase one residential property and the spouse/ dependents will be permitted to take up employment in private sector (in relaxation to salary stipulations for Employment Visa) and undertake studies in India.
2) Simplification of FDI policy for various sectors: The Cabinet has given its ex-post-facto approval for FDI policy amendments that were announced by the Modi government on June 20th this year. These amendments pertained to sectors of food products manufactured/produced in India, defence, broadcasting, pharma, civil aviation, private security agencies, animal husbandary, single brand retail trading etc. The aim of the amendments was to liberalise and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows.
3) Project Development Fund for India’s economic footprint in Cambodia, Laos, Myanmar and Vietnam: Approval was given to create a Project Development Fund (PDF) with a corpus of Rs 500 crore for catalysing Indian economic presence in the Cambodia, Laos Myanmar and Vietnam.
The PDF shall be housed in Department of Commerce and operated through the EXIM Bank. The PDF shall be governed by an Inter-Ministerial Committee under the chairpersonship of the Commerce Secretary. The key advantage of positioning India on the regional value chains is securing on a long term basis, a dedicated market for Indian raw materials and intermediate goods besides a dedicated source for inputs and raw materials for Indian industry, says the government release.
4) Dissolution of Central Inland Water Transport Corporation: Due to inherent limitation and infrastructure bottle necks, the operations of CIWTC could never become viable and the company has been incurring losses since inception. The company has only five employees at present. The Voluntary Retirement Scheme for CIWTC was implemented in the year 2015 as per decision of ‘the Cabinet on 24.12.2014.
5) Initiatives to revive construction sector: The CCEA led by PM Modi has also approved several measures to revive the construction sector. It has eased rules for quicker settlement of disputes in the construction sector, Finance Minister Arun Jaitley said, to pump liquidity and activate some of the stranded real estate and infrastructure projects. The government and the central bank would now also consider de-stressing stalled construction projects to help improve liquidity in the short run.