Union Cabinet had abolished Foreign Investment Promotion Board (FIPB) for outliving utilities. Finance minister Arun Jaitley said that there are now only 11 sectors where foreign investments require prior government approval.
FIPB was an inter-ministerial body organised by the finance ministry under the department of economic affairs. It consists of secretaries of various ministries who made recommendations on foreign investment applications.
FIPB was first constituted under the Prime Minister’s Office following economic liberalisation in the early 1990s.
Arun Jaitley said that with the abolition of the FIPB, foreign investments in 11 sectors would be handled by the respective administrative ministries in consultation with the department of industrial policy & promotion (DIPP), ministry of commerce, which will also issue the standard operating procedure (SOP) for processing of applications and decision of the government under the extant FDI policy
Proposals in sensitive sectors need the approval of the home ministry. On the proposals pending with FIPB, he said they will go back to the ministries concerned.
There could also be a provision for quarterly review of pending proposals by the economic affairs secretary and annual review by the finance minister. The FDI proposals above Rs 5,000 crore would continue to be cleared by the Cabinet Committee on Economic Affair
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