Disbanding FIPB will further improve ease of doing business and the respective regulators of the ministries concerned are "sufficient" to take care of investment proposals, Commerce and Industry Minister Nirmala Sitharaman today said.
The government has decided to abolish FIPB and come up with a new mechanism that could include approvals by the ministries concerned for expeditious clearance of foreign investment proposals.
"The whole idea was to make doing business in India easier. Logical conclusion was to wind up FIPB because over 92 percent of FDI is coming though the automatic route," she told reporters here.
"Only 6-7 percent is remaining, and every department (the sectors under approval route) it is aimed at has a departmental framework or a regulator for it," she said.
"If there is a regulator for that department concerned that is sufficient to take care of investment proposals which are coming in and for them to be screened," Sitharaman said.
She said the foreign investment promotion board (FIPB) was only going to make it one "more layer". The additional layer FIPB is no longer required, she stressed.
The decision, the minister said, is in line with the government's policy for 'maximum governance and minimum government'.
"Regulators of the respective ministries for those 6-7 percent, which are left behind, are more than adequately endorsed to take care of screening such applications," she said.
Economic Affairs Secretary Shaktikanta Das, who heads the FIPB, has said that in another two months, the government hopes to put in place a new mechanism to replace the body.
Currently, FIPB offers single-window clearance for applications on FDI in India that are under the approval route. The sectors under the automatic route do not require any prior approval and are subject to only sectoral laws.
FDI into the country increased by 30 percent to USD 21.62 billion during April-September this fiscal.
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