The Union Minister of Commerce, Industry and Textiles, Shri Anand Sharma has announced that the Government has decided to remove limitations of compulsory lock-in-period, minimum build up area for FDI in the construction industry for old age homes and all educational institutions with immediate effect. There is a huge deficit of educational infrastructure in the country and there is a need to attract foreign investments for creating world class infrastructure in the education sector Shri Sharma said while chairing the First meeting of Government-Industry Task Force, here today. The meeting discussed the whole gamut of issues being faced by the Indian industry and government response to that.
The Minister informed the Industry about the government™s effort to rationalize various procedures for the industry and the efforts to bring down the transaction cost. Recalling the interaction chaired by the Finance Minister and the industry demand for the announcement of duty drawback scheme replacing the DEPB scheme, Shri Sharma informed that Finance Ministry has taken a view to announce a revamped duty drawback scheme with duty draw back rate matching the pre-recession DEPB rates. Furthermore, he disclosed that he is going to undertake a high-level consultation with export promotion councils and will be announcing export incentives for the current financial year before Diwali.
Expressing satisfaction over the fact that FDI inflows in the first seven months of the current calendar year have been US$ 17.83 billion which is 43% increase over the previous period, he briefed the task force about his interaction with various foreign investors in his recent visit to USA. As recent as yesterday, the British Petroleum Chairman has re-affirmed its commitment for US$ 7.5 billion investment by the end of this month. This will bring in new technologies in oil exploration. The key policy objective, while attracting FDI inflows, has been to focus on areas which are technology intensive and creates employment opportunities in the country, apart from promoting clean/green manufacturing he said.
On the issue of FDI in pharmaceutical industry, he informed that the Prime Minister will be convening an Inter-Ministerial Meeting soon to deliberate on whether FDI in the pharmaceutical sector should continue on the Automatic Route even for brown field investments or it should be placed under the Government Approval route. While we recognize that the pharmaceutical industry like any other industry segment undergoes the stage of transformation and consolidation, yet the indigenous capacities of research and production of such medicines need to be preserved and nurtured, he added.
The Minister also told that with regard to DMIC project, the State Governments of Maharashtra, Gujarat and Haryana have started the process of acquiring land for development of these investment regions and the government has decisively moved from planning to implementation phase. He also assured the industry that another big-ticket policy initiative of National Manufacturing Policy will also soon see the light of the day as a GoM is working on quick ironing out of the minor difference.
Industry led by Shri Harsh Pati Singhania, Shri Rajan Bharti Mittal, Shri Sanjay Kirloskar and Shri Venu Srinivasan and Shri Rajiv Kumar raised the concerns pertaining to high interest rates and their lack of validity as a way to fight inflation. They also said that industry is facing problems pertaining to Environment, land and natural inputs like coal. Industry also asked the government to look into the labour related rigidities and asked for measure to help for small and medium enterprises.