New Delhi, Jan 10 (IBNS): In a major economic reform by the Narendra Modi-led government, the Union cabinet on Wednesday cleared 100% Foreign Direct Investment (FDI) in single brand retail.
Giving some boost to the national carrier, the Cabinet also allowed foreign airlines to invest up to 49 per cent under approval route of Air India.
The cabinet approved the extension of FDI in single brand retail from 49% to cent percent in automated route.
The UPA government has earlier extended the FDI to 49% in this sector.
The FDI in real estates has been increased to 100%.
The crucial Cabinet meeting on Wednesday was chaired by Prime Minister Narendra Modi.
The government said the Cabinet moves on FDI are intended to liberalise and simplify the FDI policy so as to provide ease of doing business in the country.
In turn, it will lead to larger FDI inflows contributing to growth of investment, income and employment, the government said in a statement.
Measures undertaken by the Government have resulted in increased FDI inflows in to the country, the government said.
During the year 2014-15, total FDI inflows received were US $ 45.15 billion as against US $ 36.05 billion in 2013-14.
During 2015-16, the country received total FDI of US $ 55.46 billion.
In the financial year 2016-17, total FDI of US $ 60.08 billion has been received, which is an all-time high, read the statement issued by the government.
Speaking on FDI cap on SBRT, the government said in its statement: "Extant FDI policy on SBRT allows 49% FDI under automatic route, and FDI beyond 49% and up to 100% through Government approval route. It has now been decided to permit 100% FDI under automatic route for SBRT."
In aviation sector, as per the extant policy, foreign airlines are allowed to invest up to the limit of 49% of their paid-up capital under Government approval route, in the capital of Indian companies operating scheduled and non-scheduled air transport services.
However, this provision was presently not applicable to Air India, thereby implying that foreign airlines could not invest in Air India.
It has now been decided to do away with this restriction and allow foreign airlines to invest up to 49% under approval route in Air India subject to the conditions that - Foreign investment(s) in Air India including that of foreign Airline(s) shall not exceed 49% either directly or indirectly and substantial ownership and effective control of Air India shall continue to be vested in Indian National.
Speaking on real-estate sector, the government said: "It has been decided to clarify that real-estate broking service does not amount to real estate business and is therefore, eligible for 100% FDI under automatic route."
In the sector of power exchanges, the government said: "Extant policy provides for 49% FDI under automatic route in Power Exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010. However, FII/FPI purchases were restricted to secondary market only."
It has now been decided to do away with this provision, thereby allowing FIIs/FPIs to invest in Power Exchanges through primary market as well, the government said.
Union Minister Suresh Prabhu tweeted: "Major #FDI policy reforms approved by Union Cabinet chaired by Shri @narendramodi across various sectors. This will liberalise and simplify the FDI policy and provide ease of doing business in the country.#ReformsInFDIpolicy #FDIpolicyForNewIndia."
The move has been made on a day when giving positive news to people in the country, the World Bank has projected India'a growth rate to 7.3 per cent in 2018.
In its report, the World Bank said: " India is expected to pick up to a 7.3 percent rate in fiscal year 2018/19, which begins April 1, from 6.7 percent in FY 2017/18."
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