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NEW DELHI, Sept. 6

THE Steering Committee on Foreign Direct Investment (FDI) headed by Mr N.K. Singh has recommended increasing the FDI in the petroleum sector, including refining, marketing and exploration along with banking and financial services to 100 per cent. It has also suggested throwing open the real estate sector to 100 per cent FDI.

The committee has also suggested opening up Indian skies to foreign airlines together with a hike in FDI cap in civil aviation from 40 to 49 per cent and airports from 74 per cent to 100 per cent. The panel has also prescribed an increase in FDI limit in basic and mobile telephony to 74 per cent and in insurance to 49 per cent.

The report of the steering committee was submitted to the Prime minister, Mr Atal Bihari Vajpayee, here on Friday.

"The Group of Ministers on foreign investment will consider early processing of the report and submit its views to the Government", Mr Vajpayee said.

Further, the N.K. Singh committee has recommended automatic entry routes for FDI in all these sectors with the exception of few sectors in which the caps remain. "The current barriers relating to exit conditions should also be removed," the committee said. Currently, there is a cap of 26 per cent for FDI in oil refining, 74 per cent in oil marketing and 51 per cent in petroleum production, 49 per cent for basic and mobile telephony, 26 per cent in insurance, 49 per cent in banking and financial services while FDI is banned in real estate.

"The recommendations are aimed at enabling an increase in FDI flows to around $ 8 billion per annum during the Tenth Plan", Mr Singh later said while briefing newspersons about the report.

According to the committee, policy reforms, decontrol and delicensing in the power, urban infrastructure and real estate sectors should be expedited to promote private domestic and foreign investment.

Besides, the Foreign Investment Promotion Board (FIPB) should be empowered to grant initial Central level registrations and approvals where possible, with a view to speeding up the process of project implementation.

The Government's Rules of Business should be changed to empower the Foreign Investment Implementation Authority to expedite the processing of administrative and policy approvals.

The Foreign Investment Promotion Council (FIPC) should be transformed into a primary arm of the Government for promoting FDI in India, with the Department of Industrial Policy and Promotion (DIPP) continuing to act as its Secretariat.

The special economic zones, the committee report said, should be developed as the most competitive destination for export-related FDI in the world, by simplifying applicable rules, laws and administrative procedures and reducing red tape to the levels found in China. The focus should be on accelerated/immediate implementation of reforms in the country, as a whole, and not on tax sops.

According to the panel, States should be urged to enact special investment laws relating to infrastructure to expedite all investments in infrastructure sectors and remove hurdles to production in this critical sector.

The Government, it said, should consider enactment of a Foreign Investment Promotion Law to incorporate and integrate aspects relevant to promotion of FDI.

The report had not made any recommendations on FDI in the print media as the Government had already taken a decision on 26 per cent FDI in this sector, Mr Singh said.

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