With an aim to increase FDI inflows, the government today enhanced FIPB's powers to recommend foreign investment proposals of up to Rs 3,000 crore. Earlier, the FIPB had powers to recommend for investment approval of up to Rs 2,000 crore.
The Foreign Investment Promotion Board (FIPB) recommended proposals are cleared by the Finance Minister and any investment beyond the new ceiling of Rs 3,000 crore will go to Cabinet Committee on Economic Affairs (CCEA) headed by the Prime Minister.
"The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with total foreign equity inflows up to Rs 3,000 crore.
"Recommendations of FIPB on proposals with total foreign equity inflow of more than Rs 3,000 crore would be placed for consideration of CCEA," an official statement said. During the April-February period of 2014-15, the foreign fund inflows have grown by 39 percent , year-on-year, to USD 28.81 billion.
The release, issued after CCEA meeting headed by Prime Minister Narendra Modi, further said the decision is expected to "expedite the approval process and result in increased foreign investment inflows".
The CCEA would also consider the proposals which may be referred to it by the FIPB / the Minister of Finance. The FIPB Secretariat in the Department of Economic Affairs (DEA) will process the recommendations of FIPB to obtain the approval of Minister of Finance and the CCEA, the release added.
Most of the sectors are presently under the automatic route, meaning only intimation is required to be given to the RBI and approval of the FIPB/CCEA is not required. No limit for foreign investment has been prescribed for the automatic route.
Proposals in certain sensitive sectors like tea, mining, and telecom (beyond 49 percent FDI) are required to be routed through FIPB.
The last meeting of the FIPB was held on April 30.