Relaxing FDI norms to spur investments in country: Das

New Delhi: Finance Ministry on Tuesday said the relaxation of FDI norms in as many as 15 sectors by the government will help open floodgates of investment in the country.

"... This (relaxation of FDI rules in 15 sectors) is a welcome decision of the government. One would expect this to spur a lot of investments in the country," Department of Economic Affairs Secretary Shaktikanta Das told reporters here.

In a major reform push, the government today relaxed the foreign investment rules in 15 sectors, including civil aviation, banking, defence, retail and news broadcasting, and also eased the process for the Foreign Direct Investment (FDI) approval.

While 100 percent FDI has been allowed in DTH, cable network and plantation crop, overseas investment limit in uplinking of news and current affairs TV channels has been raised to 49 percent from 26 percent.

The government relaxed conditions for FDI in single-brand retail and allowed 100 percent FDI under automatic route in duty-free shops and Limited Liability Partnerships (LLP) and eased foreign investment norms in the defence sector.

Elaborating further on easing FDI norms in these sectors, Das said, "...Noteworthy are the liberalisation in the construction sector. Construction sector is one where maximum growth potential, maximum multiplier effect takes place."

"The availability of finance in half complete projects will ensure that these projects are completed," he added.

In the construction sector, minimum capitalisation norms and floor area restrictions have been removed. The government has also eased the exit norms for the foreign players in the sector.

"100 percent FDI under automatic route has been allowed in completed projects for operation and management of townships, malls/shopping complexes and business centres," the commerce and industry ministry said in a statement.

Das noted that the government's focus has been opening more sectors, increasing sectoral caps, putting more sectors under automatic route and removal of conditionalities.

On relaxation of FDI limit in banking and defence space, he said the aim was to move further towards ease of doing business, and make the regulations simple and easy to comply.

"It is a process of constant review. It was felt when it was reviewed that this was something desirable and it was done. Up to 74 percent you allow them to invest. When you say maximum 49 percent should be FII, why you have this artificial limits and conditionalities," Das said.