New Delhi, Sept. 4 (PTI): The high-powered N.K. Singh committee on foreign direct investment (FDI) is understood to have favoured raising the sectoral caps in banking, insurance, telecom and civil aviation sectors.
The committee’s report is likely to be submitted by the deputy chairman Planning Commission K.C. Pant and member N.K. Singh to Prime Minister Atal Bihari Vajpayee on September 6, official sources said.
Communications minister Pramod Mahajan had last week said he had no objections to a hike in FDI cap in telecom to 74 per cent from the existing 49 per cent. Sources said the report had made far reaching recommendations for progressive liberalisation of FDI policy in order to achieve around $ 4.5 billion average annual FDI inflows during the Tenth Five Year Plan period.
The report is also understood to have favoured making the Foreign Investment Promotion Board a statutory body and empowering the foreign investment implementation authority as part of furthering investment facilitation efforts.
Sources said the committee was in favour of liberalising FDI norms in banking, insurance and telecom in special economic zones (SEZs) as well. The committee has favoured a phased relaxation in the existing FDI caps in SEZs in banking where the present limit is 49 per cent and insurance where the present limit is 26 per cent, sources said.
With regard to the telecom sector, sources said the committee is understood to have favoured up to 100 per cent FDI for franchisees in these zones. The N.K. Singh committee is also understood to include recommendations on a single comprehensive legislation for SEZs. While the FDI in manufacturing sector has already been opened to a considerable extent, the committee has suggested opening up the services sector for FDI in these zones, they said adding that wholesale trading wherein FDI up to 51 per cent is permitted would also be opened in a phased manner up to 100 per cent in these zones.
With regard to retail trading, sources said the committee is understood to have opposed FDI in the sector at this stage. It might be recalled that the standing committee of secretaries (CoS) constituted to assist the Cabinet Commitee on Economic Affairs and economic reforms had listed revising the policy on FDI as one of the 15 priority themes for 2002-03. The CoS would undertake a fresh look at the procedures for FDI clearances and strengthening investment facilitation based on the inputs of the N.K. Singh committee.
Members of the committee include secretaries from the ministries of finance, external affairs and industry. Other members include chief secretaries of Bengal, Andhra Pradesh, Uttar Pradesh and representatives from the industry chambers CII and Ficci.