New FICCI-government body to facilitate FDIs to industry
12 September 2009
The union cabinet has decided to set up a new agency to facilitate foreign direct investment (FDI) inflows into the country, reports CNBC-TV18. Invest India will be set up as a not-for-profit company under section 25 of the companies act 1956.
Invest India is the new body which is responsible for promoting FDI into the country and will draw in dollars from global investors. Designed on a PPP (private-public partnership) basis, the industry body Federation of Indian Chambers of Commerce & Industry (FICCI) will hold 51-per cent stake in the company with the central government holding 49-per cent stake.
The centre will subsequently offload upto 14 per cent to state government.
Anand Sharma, commerce minister, said, ''The new agency will be a pure facilitator agency and will help a lot of companies with a helping hand.''
This particular agency will be specially focused on facilitating FDI inflows from small and medium enterprises and also help in coordinating with state agencies for securing the requisite clearances. The move comes at a time when FDI inflows in July 2009 stands at $3.51 billion, up 56 per cent from last year's level.
Ajay Shankar, secretary of department of industrial policy and promotion (DIPP) said that the foreign investment promotion board (FIPB) is the body for giving government approvals. This will be a facilitating agency. Currently 80 per cent of FDI approvals in the country happen through automatic route.
Though it's a welcome move and is in line with similar agencies abroad, the efficacy of such an agency will be tested when it comes to securing clearances at the state level. On his part the DIPP secretary has maintained that this agency will go a long way in ensuring that FDI inflows in the current fiscal will match last year's levels.