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Finance Minister P. Chidambaram’s deadline for a decision on increasing foreign direct investment (FDI) limits by the third week of July is likely to be missed, as key Ministries, including Information & Broadcasting, Home Affairs, Civil Aviation, Space and Atomic Energy, are yet to submit their views.
With the Monsoon Session of Parliament set to get delayed, officials in the Department of Industrial Policy and Promotion (DIPP) say they now have more time to nudge “undecided’’ Ministries to take a stand.
The Government is looking at raising FDI limits across sectors to attract more investments to check the widening current account deficit and to rein in the falling rupee.
The UPA Government wants a decision on the matter to be taken before the Monsoon Session of Parliament, as attention would then shift to other issues such as the Food Ordinance and the pending Insurance and Pension Bills.
“The timelines are now relaxed a bit because it is almost certain that the Monsoon Session, earlier expected to begin by July-end, is getting delayed. We have more time to work on it,” a senior DIPP official told Business Line . Arvind Mayaram, Secretary, Department of Economic Affairs, has prepared a report that proposes raising FDI limits across sectors including retail, defence, I&B, telecom, civil aviation, oil and natural gas and couriers.
Based on consultations with the Ministries on the Mayaram panel’s proposals, DIPP Secretary Saurabh Chandra is working on a report that would suggest what is feasible and widely acceptable within the Government.
While Chandra had asked the Ministries and departments involved in the process to submit their comments by July 5, five key players are still to act.
The I&B Ministry, which has to take a call on raising FDI limit in print media and FM Radio from 26 per cent to 49 per cent under the automatic route, is still holding discussions with stakeholders. “It is a sensitive matter. Views are divergent. We are still in consultation with stakeholders,” an I&B official told Business Line .
The Civil Aviation Ministry, reportedly, is not too keen to support the proposal to raise FDI limit in domestic airlines to 74 per cent from 49 per cent, but has not officially said so.
The Ministry of Home Affairs, too, has expressed its reservations on FDI in ‘sensitive’ sectors such as media, defence, telecom and civil aviation. The DIPP has assured the Ministry that a representative from the Ministry would be part of all decisions on FDI in sensitive sectors.
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