Relaxed FDI norms to boost manufacturing, generate jobs: Shaktikanta Das

By: |
New Delhi | June 20, 2016 6:16 PM

Manufacturing and job generation will get a boost by the latest round of liberalisation in Foreign Direct Investment (FDI) norms that include doing away with dual clearances, Economic Affairs Secretary Shaktikanta Das said today.

"With this (FDI) liberalisation, we expect manufacturing activity to come in...more activity in defence products. The driving force behind the whole thing is that all this investment should facilitate creation of jobs," he told reporters here. (Reuters)“With this (FDI) liberalisation, we expect manufacturing activity to come in…more activity in defence products. The driving force behind the whole thing is that all this investment should facilitate creation of jobs,” he told reporters here. (Reuters)

Manufacturing and job generation will get a boost by the latest round of liberalisation in Foreign Direct Investment (FDI) norms that include doing away with dual clearances, Economic Affairs Secretary Shaktikanta Das said today.

“With this (FDI) liberalisation, we expect manufacturing activity to come in…more activity in defence products. The driving force behind the whole thing is that all this investment should facilitate creation of jobs,” he told reporters here.

Launching the second set of liberalisation of the foreign investment, the government relaxed the norms in host of sectors including defence, civil aviation, pharmaceuticals, single brand retail trade (SBTR), e-commerce in food products, broadcasting carriage services, private security agencies and animal husbandry.

The last set of major FDI reforms were announced by this government in November 2015.

“The decision on FDI liberalisation today is a followup to the decisions which were taken last November when a whole lot of reforms were announced. In the budget (the relaxation) was announced in stock exchanges and NBFCs,” Das said.

He further said that under the amendment norms, wherever approval is given by the regulator, the companies would not need to the approach the Foreign Investment Promotion Board (FIPB) for clearance.

Basically, Das said, “the idea is to go for process simplification and make everything process driven. Now today’s decisions are also a continuation of the same approach that wherever there are regulators, there is no need for dual clearance by FIPB”.

The whole approach is to make the process of FDI approval “as far as possible automatic,” he said, adding faster clearances would encourage investment flows and generate additional jobs in the economy.

Moreover, he said, the policy changes also indicate that the government would continue the process of reforms.

On changes in the FDI norms in the civil aviation, Das said the amended policy will improve flow of investment in the sector.

“This will be a very big (policy) changer,” he said, adding civil aviation companies can access larger FDI flows.

Larger investments, he added, would “definitely assist the domestic aviation companies to strengthen themselves, to expand their network and also in the process create jobs for our youth”.

Moreover, he added, there would be “no pressure on anybody to bring FDI. It is not compulsory on domestic aviation companies to bring FDI. If they need, they will get it and they will be able to increase there capability”.

As regards the defence sector, Das said, the government has further liberalised the policy as the existing norms did not attract investment proposals.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1GST Council cuts tax on COVID-19 medicines, equipment
2India can achieve 10% growth rate in FY22 if govt provides stimulus to combat COVID-19 pandemic
3Odisha’s Ganjam district generates 1 crore person days of work under MGNREGA in 2 months