Aiming to simplify the Foreign Direct Investment (FDI) route, Finance Minister Arun Jaitley announced today that the Foreign Investment Promotion Board (FIPB) would be abolished in the year 2017-18. FIPB was a government body that was involved in clearing FDI proposals worth up to Rs 5,000 crore. The finance minister also announced that the FDI policy is likely to be further liberalized in the coming months.
“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 liberalization of the FDI policy is under consideration and necessary announcements will be made in due course,” said the finance minister.
The decision comes in the wake of the increase in the number of FDI proposals coming through the automatic route. Currently, more than 90% of FDI is coming through the automatic route. FIPB was only involved in clearing investment proposals in sectors not covered under the automatic route. This had already diminished the role of FIPB, due to which the decision to abolish it has been taken.