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The captains of Indian industry unanimously gave a thumbs up to the government’s decision to do away with the Foreign Investment Promotion Board (FIPB) and introduce measures for a transparent political funding, as announced in the Union Budget.
“The economic reform agenda continues at a rapid pace, with the abolition of FIPB and the move for time-bound listing of CPSEs. The budget focuses on measures to increase transparency with a broad strategy to put in place the mechanisms and institutions for the future of the country, including through digitalisation and formalisation of the economy,” said Naushad Forbes, President, Confederation of Indian Industry (CII).
Finance Minister Arun Jaitley said in his budget speech that the FIPB will be scrapped as 90 per cent of the foreign direct investment (FDI) proposals come through the automatic route.
“As a result, it makes sense to do away with the FIPB,” Jaitley said, adding that the roadmap for abolishing it will be taken in the coming months.
The FIPB is a body under the Finance Ministry that seeks to offer single-window clearance to foreign investment proposals.
According to Gopal Jiwarajka, President, PHD Chamber of Commerce and Industry, scrapping of FIPB will “attract foreign investors vis-à-vis removed roadblocks to foreign investment and boost Make in India programme.”
Political fundingAmong other things, the Indian industry welcomed the measures announced to make the process of political funding more transparent.
“Political funding reforms to enable higher level of transparency like maximum amount of cash donation at ₹2,000 per person and mandatory filing of tax return within the time prescribed for all political parties is a good start and welcomed,” Jiwarajka added.
Pankaj Patel, President, Federation of Indian Chambers of Commerce and Industry (FICCI), said the reduction in the tax rate for individuals in the lowest income tax slab will leave more disposable income in the hands of the people and will enhance consumption demand which had taken a hit from demonetisation.
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