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Phalguna Jandhyala

Hyderabad, Dec. 2 The Confederation of Indian Industry in its pre-Budget memorandum for the Union Budget 2009-10 has suggested single window information on the foreign direct investment, preferably through the Ministry of Overseas Indian Affairs.

According to its pre-Budget memorandum for MSMEs, the current policy with respect to FDI, including investments by NRI/PIO is notified by the Department of Industrial Policy and Promotion (DIPP).

“But the Ministry of Overseas Indian Affairs is responsible for the promotion of investment by NRIs in general and the Ministry of Small and Medium Enterprises administers the MSME Act. Thus there are different agencies handling policy and implementation of NRI investments into the SMEs,” the memorandum stated.

Regarding the issues, it states that the MSMED Act 2006 does not contain specific provision regarding FDI into MSMEs. “The present Industrial Policy does not distinguish between a medium and large enterprise, it only has categorisation of small and large industries. The FDI policy also adopts the same interpretation as the Industrial Policy,” the note said.

CII has suggested maintenance of comprehensive statistics on all FDI in SME sector.

As part of the policy guidelines to encourage FDI participation by NRIs in the SME sector it said there should be no export obligation, continuing SSI status even if FDI is more than 24 per cent. “Also a separate platform of facilitation, automatic approval for 100 per cent FDI from NRIs and other promotional measures need to be taken,” it said.

The industry body has also suggested rationalisation of transfer pricing regulations under both the Income Tax Act and Customs Act.

“Modifications in the Service Tax Act to allow Service Tax Credit, where an assesse is engaged both in manufacturing and trading of goods. Phasing out the requirement of C Forms so as to reduce the administrative works involved in the maintenance,” are some of the other suggestions it has made.

More Stories on : Foreign Direct Investment | Budget | SSI

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