Non-resident affairs get a ministerial berth

The India Investment Centre (IIC), at present under the finance ministry, will find a new home with the newly constituted non-resident affairs (NRA) ministry.

According to sources, the Prime Minister's Office went through a proposal put forward by Non-resident Indian (NRI) Affairs Minister Jagdish Tytler and made a decision on who would be part of the ministry.

The IIC was set up during the tenure of Prime Minister PV Narasimha Rao as a "one-stop shop" for channelising investment from NRI's and other sources into India, who might find it an otherwise cumbersome procedure to deal with the red tape here.

The IIC remained toothless however, and has now been reduced to an avenue through which only glossy promotions are done without any of the original mandate of the Centre being fulfiled.

With the NRI Affairs ministry taking it over it is hoped that it would get a more meaningful role. This means that the ministry could also get the green signal to set up special economic zones (SEZs) for NRIs wishing to invest in India.

Apart from this, the ministry will be getting a veto power on foreign and NTRI investments (excluding foreign and non-resident investments in service and industrial projects) and PIO contributions to the government and parental organisation.

Tytler's attempts to get to meatier parts like facilitating parity between foreign institutional investors (FIIs) and NRI investments when it came to investments in the Indian stock markets have come a cropper with the PMO vetoing the proposal.

The new ministry will however be getting representations on the Foreign Investment Promotion Board, and the Foreign Investment Implementation Authority as well as the Indian Council for Cultural Relations.

Significantly, the ministry will also be getting a role in the emigration policy of the country with the labour ministry being asked to take the NRI ministry into confidence on these matters.

In a meeting held last week at the PMO, a final shape was accorded to the new ministry and while Tytler did not get most of what he had been asking for, like the setting up of foreign campuses of Indian Universities, nor a sizeable slice of the foreign investment pie, for now, he will have his plate full while deciding the guest list for the first 'non-saffron' Pravasi Bharatiya Diwas in Januray. Wonder if V S Naipaul will be invited?