Millennium Post

Day after Sharma’s FDI cap byte, FM too backs revisits

Foreign direct investment (FDI) limits in different sectors where ceilings are not serving their intended purpose will be revisited, Finance Minister P Chidambaram said on Monday. ‘The government is looking at FDI caps to see if they are indeed serving the purpose. Otherwise, the caps could be revisited,’ he said at a meeting of the Finance Ministry’s Parliamentary Consultative Committee.

While the country allows 100 per cent FDI in many sectors, there is a ceiling in sensitive segments like multi-brand retail, insurance, defence and telecom. The Government is keen on increasing FDI ceilings to attract more inflows and finance the widening current account deficit (CAD).

Commerce and Industry Minister Anand Sharma had said on Sunday that he would soon move the Cabinet for raising FDI cap in telecom and defence sectors as the government wanted to revive economic growth and spur investments. Chidambaram said that the major reason for India’s large CAD is that the country has huge dependence on import of certain items like oil, coal and gold.

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