The Eleventh Plan draft document has built a strong case for relaxing foreign direct investment (FDI) norms in key sectors like insurance, private banking, single brand retailing and broadcasting."The progress regarding elimination of FDI limits in key sectors also needs to continue in order to increase FDI flows and stimulate transfer of technology, which is critical for improving competitiveness," said the 11th Plan draft document. The draft would be discussed at the full Planning Commission panel meeting tomorrow. FDI in the insurance sector is now capped at 26% while it is at 51% in single brand retailing. The FDI cap in sectors like defence production and print and electronic media is 26%. Sectors like air transport, asset reconstruction firms and cable network are allowed FDI up to 49%.Given the current scenario, the document says FDI could increase significantly during the 11th Plan period. It also suggested that while containing trade liberalisation, government should take steps to consolidate the gains from FDI by reducing delays in state-level clearances.
