Cabinet unlikely to take up FDI in pharma, real estate relaxation

Among others, proposal to set up Rs 5,500-crore Indian Inclusive Innovation Fund may also come up for discussion

The Cabinet will meet on Monday but is unlikely to take a call on relaxing foreign direct investment (FDI) in real estate and pharmaceuticals as well as India's position in the Word Trade Organization (WTO).

This is because commerce and industry minister Anand Sharma had to leave for the UK owing to personal reasons.

Among others, a proposal to set up a Rs 5,500-crore Indian Inclusive Innovation Fund may also come up in the Cabinet meeting. The fund will be under the Ministry of Micro, Small and Medium Enterprises (MSME).

Officials said although the Planning Commission had wanted the fund to be set up under the Department of Science and Technology rather than MSME, which has floated a Cabinet note on this, the issue has now been resolved.

The fund proposes to invest in a new generation of Indian entrepreneurs who are either building or planning to build world-class enterprises that focus on the problems of the poor, without compromising on economic success. It will operate as a for-profit entity, with a focus on social investment.

In the meeting, the Cabinet is to take up the matter concerning what will be India's strategy during the upcoming ministerial conference of the WTO during December 3-6 at Bali, Indonesia.

On FDI in real estate, the Centre is planning to relax the policy for foreign investors, who will now be allowed to take back the entire invested amount before three years of obtaining approval.

According to the current FDI policy, the lock-in period of three years applies to every tranche of investment brought in by a foreign player from the date of receipt or from the date of 'completion' of minimum capitalisation, whichever is later. Developers had long been complaining that such restrictions deter them from investing in the Indian market.

The Cabinet was also supposed to take a decision on FDI policy in the pharmaceutical sector. While the health and commerce ministries have batted for putting more restrictions for new players entering the sector here, the finance ministry is of the view the sector should not have too many riders that deter the country from earning the required foreign exchange.

Separately, the Cabinet committee on WTO matters was scheduled to meet on Monday, to decide what should be India's negotiating mandate for having a global trade deal under the aegis of WTO. India, along with other developing countries, has been pushing the WTO to take up the issue for food security and the freedom to provide farm subsidies, which are currently prohibited under the global trading norms.