Budget 2016: Jaitley lays ground to boost foreign investments in India


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To improve the investment environment and boost Foreign Direct investment (FDI), India is all set to remove policy roadblocks as the Finance Minister Arun Jaitley announced a slew of measures to address the issue. Relaxing some of the existing norms, to encourage investments in India across the sectors, Mr Jaitley announced FDI reforms in Insurance and Pension sector, Asset Reconstruction Companies and Stock Exchanges.

Announcing investor friendly reforms, Mr Jaitley focused on ensuring marketing freedom in order to allow incentives for gas production from deep-water, ultra deep-water and high pressure, high temperature areas. Sending out a positive signal to foreign investors, the government announced that 100 per cent FDI would be allowed through the FIPB route in marketing of food products produced and manufactured in India.

Leading foreign investors have been critical of India’s reluctance to open up FDI in certain key sectors and had put a lot of their hopes on the Modi administration. The government has allocated Rs 55,000 crore ($9 billion approx) in the Budget for Roads apart from an additional Rs 15,000 ($2.5 billion approx) crore to be raised by NHAI through bonds.  Prime Minister Narendra Modi during his overseas visit has been focusing on promoting the India story and wooing foreign investors to invest especially in India’s infrastructure. From bullet trains to Smart Cities, India has been making a strong case for foreign investors in the infrastructure sector.

By suggesting an ‘Action plan’ for revival of unserved and underserved airports to be drawn up in partnership with State Governments, it could also open up more projects to foreign investors. With the ease of doing business, the decision to make some amendments in Companies Act to improve the enabling environment for start-ups is a welcome step. Foreign investors have expressed interest in being a part of the ‘Start-up India’ initiative. This should augur well for the investment potential in India.