Finance Minister Arun Jaitley on Wednesday announced the abolition of FIPB, a body that clears proposals envisaging foreign investment up to Rs 5,000 crore.
While presenting the Union Budget, The minister also announced that further liberalisation of the FDI policy is under consideration. "FIPB has successfully implemented e-filing and online processing of FDI applications. We have now reached a stage where FIPB can be phased out. We have, therefore, decided to abolish the FIPB in the year 2017-18.
Our roadmap for the same will be announced in the next few months. "In the meanwhile, further liberalisation of the FDI policy is under consideration and necessary announcements will be made in due course," he said.
Investments in sectors that are not under the automatic route require approval of the Foreign Investment Promotion Board (FIPB).
Over 90 per cent of the foreign direct investment (FDI) is coming through automatic route. Currently, FIPB offers a single window clearance for applications on FDI in India that are under the approval route.
The sectors under automatic route do not require any prior approval from FIPB and are subject to only sectoral laws. FIPB was initially constituted under the Prime Minister's Office (PMO) in the wake of the economic liberalisation drive of the early 1990s.
The Board was reconstituted in 1996 with transfer of the FIPB to the Department of Industrial Policy and Promotion (DIPP). It was again transferred to the Department of Economic Affairs, under the Ministry of Finance, in 2003.
FDI into the country increased by 30 per cent to USD 21.62 billion during April-September this fiscal.