The Commerce and Industry Ministry has its fingers crossed over whether its proposals for easing foreign direct investment (FDI) rules in railways and construction development sectors will pass the muster with the Election Commission.
There is an apprehension that it may not be possible to adhere to the EC guideline of not publicising a decision taken by the Government while the model code of conduct is in place in case the Cabinet approves the two FDI proposals.
“The nature of the decisions on the change in FDI rules is such that these would necessarily involve a bit of publicising. Press Notes have to be issued and wherever required FEMA rules, too, would have to be modified. Some publicity is inevitable,” a Government official told
The Ministry is, therefore, unsure whether the EC would give a nod to the Cabinet to take up the two issues less than a month before the general elections are scheduled to kick-off. The model code of conduct is in place since March 5 as voting begins on April 7.
“We are hoping for the best as we are promising to be as low-profile on the two issues as possible. EC will express its opinion soon,” the official said.
The EC, at present, is examining a number of items that are awaiting Cabinet clearance that includes the proposals for liberalising FDI in the two sectors.
It had asked the DIPP to explain how the policy on railways, which proposes 100 per cent FDI through automatic route, would be floated, and the procedures that would be followed and whether the FDI decisions would show the ruling party in favourable light.
The DIPP had its hopes pinned on its proposal for railways as it has been approved by all the Departments and Ministries after concerns posed by the Ministry of Home Affairs and Department of Economic Affairs (DEA) were addressed.
The going is expected to be difficult for the construction development sector, where the Government has sought to relax rules on changing land-use norms, as the Urban Development Ministry wants the new rules to apply with retrospective effect and the DIPP firm about its prospective implementation.