Page 303 - economic_survey_2021-2022

Industry and Infrastructure 277

Box 1: FDI Policy reforms and Other Measures during the
Covid-19 Pandemic period

The changes in the FDI policy can be broadly categorized into measures taken to improve foreign
participation while protecting Indian industry from opportunistic takeovers, to enhance transparency
and rationalization of processes and steps to monitor and expedite implementation.

a. Measures taken to allow greater foreign participation
(i) Defence Sector: The FDI policy amendments, notified vide Press Note 4 (2020 series)
dated 17.09.2020, have been carried out to realize the vision of an AtmaNirbhar Bharat.
Now, FDI in defence sector is allowed up to 74 per cent through automatic route (from
earlier 49percent) for companies seeking new industrial licenses. FDI beyond 74 percent
and up to 100 per cent will be permitted under Government route. For existing FDI
approved holders/defence licensees, infusion of fresh foreign investment up to 49percent
resulting in change in equity/ shareholding pattern can be done by making declaration
within 30 days.

(ii) Insurance Sector: Government issued Press Note 2(2021) dated 14.06.2021 to raise the
permissible FDI limit from 49percent to 74percent in Insurance Companies under the
automatic route and allow foreign ownership and control with safeguards.
(ii) Petroleum & Natural Gas sector: Press Note 3 (2021) dated 29.07.2021 has been issued
to permit foreign investment up to 100percent under the automatic route in cases where the
Government has accorded an ‘in-principle’ approval for strategic disinvestment of a Public
Sector Undertaking (PSU) engaged in the Petroleum and Natural Gas Sector.
(iv) Telecom sector: Press Note 4 (2021) dated 06.10.2021 has been issued to permit foreign
investment up to 100percent under automatic route in Telecom services sector.

b. Curbing opportunistic acquisitions/takeovers: vide Press Note 3 (2020) dated 17.04.2020,
Government amended the FDI policy according to which an entity of a country, which shares
land border with India or where the beneficial owner of an investment into India is situated in
or is a citizen of any such country, can invest only under the Government route. Further, in the
event of the transfer of ownership of any existing or future FDI in an entity in India, directly or
indirectly, resulting in the beneficial ownership falling within the restriction/purview of the said
policy amendment, such subsequent change in beneficial ownership will also require Govern-
ment approval.

c. Measures to improve transparency and to rationalize processes include amendment of the
Standard Operating Procedure (SOP) to improve ease of processing FDI proposals.

d. ‘FDI Monitoring Cell’ has been formed which follows up with applicant/ investor, to expedite
FDI proposals with a view identify and hurdles if any. An Inter-Ministerial Committee (IMC)
has been constituted under the Chairpersonship of Secretary, Department for Promotion of In-
dustries and Internal Trade to take appropriate decision on delayed proposals and those escalated
by Administrative Ministries/ Departments.

Performance of Central Public Sector Enterprises

8.16 CPSEs are an important constituent of the Indian industry. As on 31.03.2020, 256
CPSEs were operational. The overall net profit of operating CPSEs during 2019-20 stood at