While foreign airlines were allowed to invest up to 49 per cent in the paid-up capital of Indian private airlines under the government approval route, this provision was not applicable to Air India. As the real estate business has been crippled, allowing 100% FDI under the automatic route for real estate broking services can help matters.
They also came weeks before the BJP government presents its fifth and final full year budget on February 1 before general elections next year.
As some critics have pointed out, the automatic approval of 100% FDI in single-brand retail comes with new caveats to replace existing ones and which will not be easy to meet for most companies.
"A cabinet meeting, chaired by Prime Minister Narendra Modi, gave investors the go-ahead to invest 100 per cent in single-brand retail and other sectors without government's approval, " Government Spokesman, Frank Noronha, said.
"Allowing 100% FDI under automatic route for the Single Brand retail will provide impetus to the development of infrastructural capabilities like warehousing and assist in creation of a well-organized and agile retail supply chains", said Anil Khaitan.
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Swadeshi Jagran Manch has said that easing the norms for FDI in SBRT would go against the best interest of the country. It will lead to larger FDI inflows contributing to growth of investment, income and employment. As no domestic business house may be ready to invest in debt-ridden Air India, permitting 49% foreign ownership in the airline may boost its prospects of survival. The investment of 49% can be either direct or indirect, and the loans of Air India are around 48877 Crores, with 17360 crore aircraft loans and capital loans of 31517 crores. It is expected to report a net loss of Rs 3,579 crore for 2017-18. Overseas investment policy has also been liberalised in case of power exchanges. However, foreign investors' purchases were restricted to the secondary market only.
The move should generate employment and give Indian consumers access to several global brands.
Cases under the government approval route, also requiring security clearance with respect to countries of concern, will continue to be processed by concerned administrative department or ministry.
This is published unedited from the PTI feed.