Seeking to further streamline FDI clearance procedure, the government has suggested the Home Ministry to provide details of objections on foreign direct investment proposals if it finds something amiss, a source said. The move would help in cutting down unnecessary delay in the clearance of foreign direct investment (FDI) proposals, the source added. Certain departments, including telecommunications, have stated that it becomes difficult to clear proposals if objections are not substantiated. The government sources, however, said the number of objections being raised by the Home Ministry have come down substantially in the recent months.
The Home Ministry has given security clearance to more than 5,000 investment proposals, including overseas direct investment, in the last four years. Another source said the ministry has expedited the security clearance procedure after completely revamping the entire process and relaxing various norms. The Home Ministry granted security clearance to 815 investment proposals in 2014, 1,201 proposals in 2015 and 1,260 in 2016, the official added. The Home Ministry has defined security rating parameters to evaluate the proposals uniformly. The national security clearance policy was drawn up by the ministry to fast-track the security clearance process and complete it within 4-6 weeks upon receiving the application as part of the government’s ease of doing business mantra.
As per the policy, the promoters, owners and directors of the company are mandated to give self declarations regarding any criminal history on their part, which reduced the period required to give security clearance from the earlier 2-3 months to just 4-6 weeks now. A total of 14-15 parameters have been set out in eight to nine sensitive areas like telecom, ports, civil aviation, uplinking/downlinking of TV channels or FM stations.
At present, only 11 sectors, including defence and retail trading, require government approval for foreign direct investment. Over 90 per cent of FDI proposals have come through the automatic route. Foreign direct investment inflow into India increased by 9 per cent to USD 43.48 billion in 2016-17.