INTRODUCTION:
- The Foreign Investment Promotion Board (FIPB) is nothing but a national agency of Government of India, with the duty to consider & recommend foreign direct investment (FDI) that doesn’t come back beneath the automated route.
- The Indian government in the budget 2017-18 announced its purpose of ending FIPB in the financial year 2018.
BACKGROUND:
- The FIPB was primarily constituted under the Prime Minister's Office (PMO) in the wake of the economic liberalisation effort of the early 1990s.
- In 1996, the board was re-formed with the transfer of the FIPB to Department of Industrial Policy & Promotion (DIPP).
- Later, FIPB was transferred to Dept. of Economic Affairs & Ministry of Finance. Finance Minister is the head of the board.
- The FDI flows into India in two ways, the automatic route & through the approval by the government.
- Foreign Investment Promotion Board deals with a single window authorization mechanism for FDI applications in sectors under the approval route.
- The board has handled investment applications worth up to Rs. 5,000 Crore.
REASONS CITED:
- Presently, about 90% of the Foreign Direct Investment inflows are channelled through the Automatic Route which does not require erstwhile approval from the FIPB & is subject to sectoral rules.
- For the rest of the FDI inflows (about 8% of the total FDI), every division concerned has a structure or a regulator for it.
- FIPB has successfully employed e-filling & online processing of foreign direct investment requests.
- Therefore, the government feels that it has now reached a stage where FIPB can be phased out.
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- http://www.bankexamstoday.com/2017/03/reasons-to-abolish-foreign-investment.html
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