FDI threshold reached: Planning Commission

Plan body, govt differ on FDI

Rajeeva Ratna Shah, secretary, Planning Commission, on Friday said the threshold in foreign direct investment (FDI) has been reached.

"India is one of the freest countries in the world in terms of FDI," he said at the two day Indo-US economic summit organised by the Indo-American chamber of commerce here.

This is significant as the government has been trying to lift the sectoral caps in telecom, aviation and insurance in the face of stiff political resistance.

"The FDI limit at 49 per cent for telecom is one of the highest in the world. In countries like Singapore, China and even in the US the limit on FDI in telecom is much lower. We need to shift the public discourse from policy issues to non-policy issues," Shah said.

This makes it clear the there is a difference of opinion between the government which is attempting to raise the FDI caps and the Planning Commission.

The government had proposed to raise the sectoral cap in the sectors of telecom, insurance and aviation in the Union budget but this has not been carried out due to opposition from the Left parties.

The lifting of the cap in telecom is considered to be the most sensitive with even the information bureau having reportedly recommended against raising of the cap.

"The impediment to FDI is not in the limits. The problems can be removed if the business interface with the government is improved. We are working towards setting up a government-to-business portal to integrate government of India, state government and municipal level services to facilitate transactions," said Shah.

According to him, the government needs $500 billion of capital in infrastructure, with $143 billion in power, $116 billion in transmission and distribution, $100 billion in oil and gas, $40 billion in roads, $26 billion in coal among others.