The Commerce and Industry Ministry’s proposal to relax foreign direct investment policy in construction and railways will be decided by the new government as the Election Commission is yet to respond on the two matters.
“It looks like, that now both the proposals will be considered by the new government only,” official sources said.
The new government is scheduled to be formed next month as the nine—phase general elections for the 16th Lok Sabha has started from April 7 and counting will be held on May 16.
The Ministry of Commerce and Industry had sought approval of the Election Commission to move ahead with its proposal to liberalise the overseas investment policy in railways and the construction activity.
“As the model code of conduct was in force on account of the upcoming general elections, the ministry had sought the Election Commission’s approval on the matters,” sources added.
The DIPP proposes to allow 100 per cent FDI in high—speed train systems, suburban corridors, high—speed tracks and freight lines connecting ports and mines.
The objective is to attract more FDI into the country and help the Indian Railways modernise sectors where India is yet to develop the requisite technology.
Further, in construction development projects, the department had proposed easy conditions for exit for developers before the three—year lock—in period and a change in the current requirement of having a minimum built—up area of 50,000 sq metres to 20,000 sq metres of carpet area.
It had also suggested a uniform minimum capitalisation of $5 million for both wholly—owned subsidiaries (WOS) and joint ventures with Indian partners. At present, the capitalisation requirement for WOS is $10 million.
The proposals are aimed at attracting more FDI to boost investment and economic growth.