Govt nod for new agency to promote foreign investments in India
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Last Updated: Friday, September 11, 2009, 00:17
New Delhi: The government on Thursday approved formation of an investment promotion firm, where it will partner the states and industry, to help attract foreign investors and provide them a hassle-free entry.

The Union Cabinet cleared setting up of 'Invest India', the joint venture with industry association FICCI that will hold majority stake and the government the remaining 49 per cent.

The non-profit company, to be incorporated under Section-25 of the Companies Act, "will act as the first reference point for any investor interested in India and will also facilitate setting up business with in the country in coordination with state governments," Commerce and Industry Minister Anand Sharma told reporters here.

The firm would be purely a promotional and facilitator agency and there is no overlapping with the Foreign Investment Promotion Board (FIPB), which would continue to act as an approval organ of the government.

The Centre would divest part of its 49 per cent equity in favour of states, bringing it to 35 per cent.

Sharma said it would be a tripartite company involving the Central government, states and the industry. He said the initiative was in line with about 40 other countries which have similar agencies for investment promotion.

However, he said about 80 per cent of the country's FDI comes through automatic route.

The company will have a board of directors with six members from the Department of Industrial Policy and Promotion (DIPP) and six others from FICCI.

The DIPP secretary will be its non-executive chairman and a professional managing director would run its day-to-day affairs.

"The company will provide hand-holding support to all investors," FICCI Secretary General Amit Mitra said.

Austerity drive figures in meet

Questions were raised at the Union Cabinet meeting here today about the government's austerity measures in view of drought in several parts of the country.

Clarifications were sought on how to go about enforcing the austerity as the issue came up for an impromptu discussion at the cabinet meeting presided by Prime Minister Manmohan Singh.

Cabinet sources said Agriculture Minister Sharad Pawar sought to know what sort of reception he should organise for his foreign counterpart, who had hosted him some time back, on an official visit here.

Another minister pointed out that the External Affairs Minister and the Commerce Minister travel abroad frequently on official business, suggesting that there should be laxity in austerity guidelines for them.

In a lighter vein, another minister said if the airline upgrades an official travelling economy class as the aircraft is empty, it should be considered as a commercial decision.

It was clarified that official dinners could be organised appropriately but conferences by government departments and ministries should not be held in five-star hotels.

The ministers said they would abide by the guidelines issued by the Finance Ministry.

Only two days back, External Affairs Minister S M Krishna and his deputy Shashi Tharoor moved out of five-star hotel accommodations here following directions by Congress President Sonia Gandhi.

Bureau Report

First Published: Friday, September 11, 2009, 00:17

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