Govt is yet to announce the modalities of the new system of processing applications which fall under the approval route.
New Delhi: Abolition of the 25-year-old Foreign Investment Promotion Board (FIPB) is in the final lap and this will set the stage for more reforms in the FDI policy, Finance Minister Arun Jaitley said today.
He also said some "tough steps" are required so that India increasingly becomes a tax-compliant society. Jaitley had in his Budget for 2017-18 proposed abolition of FIPB -- an inter-ministerial body under the Finance Ministry's Department of Economic Affairs that processes FDI proposals and makes recommendations for government approval.
"I am now in the final stages of doing away with the FIPB because 90 per cent of the investment in India comes under the automatic route. So for the balance 10 per cent, do we need multiple forums to give approval or (do) we need just one forum in one ministry" he said, addressing CII's annual meeting here.
The government is yet to announce the modalities of the new system of processing applications which fall under the approval route. FIPB was initially constituted under the Prime Minister's Office in the wake of economic liberalisation in the early 1990s. With FDI investment already liberalised and rules simplified significantly, abolishing FIPB will help streamline the process for foreign investment in India.
Jaitley said with the government easing the process of doing business by eliminating discretion and adopting market mechanism for allocation of resources, the industry does not have to visit corridors of power any more. And in that series of reforms, efforts are being made to simplify direct and indirect tax structure.
"(In) the entire effort to simplify both direct and indirect tax structure, some tough steps are required to see that India increasingly becomes a tax-compliant society," he said without elaborating.
Jaitley added that higher resources with the state will now mean greater investment in infrastructure and rural India. "These are going to be the two primary drivers of growth," he said.