Doing away with FIPB. 

Doing away with FIPB. 

FIPB: Foreign Investment Promotion Board

It was set up in early 1990s to promote foreign investment. It was responsible for processing the non-automatic FDI applications. 

Why govt. has abolished FIPB? 

¬ to cut red-tapism (as FIPB was responsible for the clearance of applications for FDI) 

¬ to promote ease of doing business 

¬ to make India destination for foreign investments

The impact? 

FIPB was responsible only for 11 sectors that were still not present in the automatic FDI approval list. 

FDI through Automatic Route (which does not required approval from FIPB) accounts for 90% of the foreign investments. 

So, doing away with FIPB will have no significant impact. 

Other bottlenecks: for improving inflow of foreign investments, the real bottlenecks are:

¬ complex rules (*that require case by case interpretation & hence promotes delay) 

¬ land acquisition (*due to land being a scarce resource, should it be used for setting up a factory or for the subsistence of farmers & tribals directly associated with land & forest?) 

¬ labour laws (*many countries offer very favorable labour laws & hence are able to attract & retain foreign investments) 

With Great Love, 

Er. Amit Yadav

http://www.stayfoolish.in

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