Desperate times call for desperate measures, going by the adage, the government on Thursday unleashed a barrage of sweeping reforms relaxing FDI limits in at least a dozen sectors. From telecom to tea the government liberalised FDI norms in at least a dozen sectors. Caps on FDI in Telecom has been done away while caps in insurance and defence sectors have been upped, to give a much needed boost to a flagging economy.
Prime Minister Manmohan Singh led meeting on July 16 decided to relax FDI norms in several sectors but the proposals were formally approved by the Cabinet on August 1,2013.
The cabinet also gave its nod for FDI cap in Insurance sector to be raised to 49% from the current 29%, through the automatic route. This means that foreign companies seeking to invest in insurance sector do not need government's approval. The bill on same is still pending in Rajya Sabha.
49% FDI has been allowed in single brand retail under the automatic route and above the said limit will require foreign investment promotion board (FIPB), said reports.
A similar cap was also allowed through the automatic route in a host of other sectors such as commodity bourses, power exchanges, stock exchanges, PSU oil refineries and clearing corporations
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