Foreign investment proposals amounting to Rs 400 crore are awaiting clearance from the government. The Foreign Investment Promotion Board (FIPB), which looks into foreign direct investment proposals, has not met in the last two weeks.
With the board unlikely to meet soon, more cases are likely to pile up.
The government decided to shift the FIPB from the commerce and industry ministry to the finance ministry last month. However, a formal notification in this regard has not yet been made.
As a result, there is confusion over where the secretariat of industrial assistance, the industry ministry division which processes all FDI applications, will operate from, Udyog Bhavan or North Block.
Once a formal notification is issued, the shift of the FIPB as well the concerned department to the finance ministry will be announced. According to government sources, this could mean the FIPB might meet only after the Budget.
What has worsened the logjam is the fact that there is no minister to clear the cases already approved by the board.
The new Commerce and Industry Minister, Arun Jaitley, is not clearing any proposals as the FIPB is no longer under him. The final nod has to come from Finance Minister Jaswant Singh. But, Singh and his colleagues in the finance ministry are busy preparing for the Budget.
Some more FDI proposals are pending because the government is yet to formulate a comprehensive policy specific to neighbouring countries like China.
A crucial meeting of a ministerial group on FDI has been postponed because the members are yet to give a date for the meeting.
The group has to consider the recommendations of the department of industrial policy and promotion on sector caps based on the suggestions of the NK Singh committee.
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