The Prime Minister, Dr. Manmohan Singh, had constituted an Investment Commission under the Chairmanship of Shri Ratan Tata to recommend policies that the Government can take up to step up the rate of investment in India.
The Commission has identified the following as major impediments to higher investment in India.
- Investment restrictions and/or entry route barriers in several sectors of significant investment potential/investor interest.
- Absence of long-term policies, non-implementation/reversal of policy and breach of contract.
- Lack of level playing field – especially in sectors with PSU dominance.
- Inflexible labour laws.
Many agencies engaged in doing the same or similar activities relating to FDI.
Bureaucratic delays, discretionary interpretation, vested interest, bias and subjective practices (In particular, approvals from Ministry of Environment & Forests seen as a major impediment in terms of inordinate delay).
- Centre-State divergence on investment related policies. - High cost of entry, transactions and exit; ineffective dispute resolution. Priority Sectors are not clearly identified/specified.
Based on the investment goals and the identified impediments, a set of broad recommendations have been made which could facilitate and improve the investment climate. These are listed below:
Remove/reduce restrictions on sector caps and entry route on all sectors otherthan those considered “strategic”. Permit “automatic route” for all investments within the sector cap.
marketing@alchempro.com
