The National Security Council's (NSC) proposal for an additional filter besides the Foreign Investment Promotion Board (FIPB) for clearing overseas investment on security concerns has been put on the back burner.
Instead of a new outfit, the ultra sensitive proposals for foreign direct investments (FDI) would be selectively dealt by Secretaries of key ministries, including the Home Affairs, the Department of Industrial Policy and Promotion, a high-level source said.
"We told them (NSC) that your apprehensions about terrorists and anti-social elements using the FDI route is not borne out by facts," he said.
The NSC, an advisory body on national security issues reporting to the Prime Minister, had suggested that FDI proposals in sensitive sectors like defence, telecom, pharmaceutical and airports be subjected to stringent entry norms.
Its suggestion that the proposals must be vetted by a new high-powered body besides FIPB did not find favour with DIPP, which stoutly opposed the move, the source said.
At present, FDI proposals are cleared by the Finance Minister on the recommendations of the FIPB, which has representatives from different ministries. The DIPP, the nodal agency on FDI policy, had argued that creating another layer of clearance mechanism would result in delays.
The department is keen on promoting India as a foreign investment destination. At the policy level, it has taken an initiative to frame a single composite document to remove procedural bottlenecks.
Even in the midst of the financial crunch since September 2008, FDI inflows have been stable around $27 billion annually.
