FIPB, Tariff Commission and Disinvestment Commission
In keeping with the promises made in the Common
Minimum Programme, government have reconstituted the Foreign
Investment Promotion Board. The Foreign Investment Promotion
Council will also be set up shortly. Together, they will
vigorously promote and approve foreign direct investment in India
keeping in view the objective of attracting at least $ 10 billion
every year.
In order to expedite foreign investment approvals
and also increase the transparency of the process, government
have decided to expand the list of 35 industries which are
eligible for automatic approval upto 51% of foreign equity. The
expanded list will be announced separately by my colleague, the
Minister of Industry. At present, the automatic approval
procedure is subject to the requirement that the value of foreign
equity should cover the total import of capital goods. This
condition was introduced in 1991 when capital goods imports were
subject to import licensing. As capital goods have been free of
import licensing restrictions since 1992, this condition is being
dropped.
Government have also initiated action to set up
an independent Tariff Commission.
Government have approved the proposal to
establish a Disinvestment Commission. Any decision to disinvest
will be taken and implemented in a transparent manner. Revenues
generated from such disinvestment will be utilised for
allocations for education and health and for creating a fund to
strengthen public sector enterprises. The interim Budget for
1996-97 took credit for Rs.5,000 crore through disinvestment. I
propose to take credit for the same amount. The disinvestment
will be done in three tranches, approximately in September,
November and January/ February.
Industrial Sickness
The Sick Industries Companies Act (SICA) has a
narrow definition of sickness and cannot deal with incipient or
potential sickness. Managements have been able to use the BIFR
route to abdicate their legitimate responsibilities. Under the
present dispensation workers, financial institutions, banks and
government are often the losers. I have initiated a total review
of SICA and the working of BIFR and I intend to bring a new Bill
in the winter session of Parliament.
