As part of the ongoing process of liberalisation of FDI policies, RBI set up a Steering Committee of FDI in August 2001, for suggesting measures for enhancing FDI inflows in India. Major Recommendations of this Steering Committee included the following:
1. The Government of India should enact a Foreign Investment Promotion Law which should incorporate and integrate all the relevant aspects for promoting FDI.
2. States should be urged to enact special investment laws aiming at expediting investment in infrastructure.
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3. The Foreign Investment Promotion Board (FIPB) should be given the powers for granting initial Central-level registrations and approvals wherever possible, for speeding up the implementation process.
4. The Foreign Investment Implementation Authority (FI1A) should be empowered to expedite administrative and policy approvals.
5. Detailed FDI targets for the 10th Plan should be laid down in terms of sectors, as also in terms of relevant administrative ministries and departments, etc.
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6. Sector-wise and industry-wise FDI caps should be reduced to the specified minimum levels and entry barriers should be removed.
7. The existing FDI strategy should be redrawn. Its approach should shift from a broader macro-emphasis to sector-specific targets.
8. We should build up a detailed data base relating to strengths and weaknesses of various investment sectors and locations so as to provide an authentic guide for FDI to potential investors. The entire strategy of building up this data base should be determined by modern techniques of information and marketing technology.
9. The Special Economic Zones (SEZs) should be developed as internationally competitive destinations for export-oriented FDI, by simplifying laws, rules and procedures, and reducing bureaucratic rigmarole on the lines of China.
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10. Domestic policy reforms in power, urban infrastructure, and real estate, and de-control/de-licensing should be expedited for attracting more FDI.
However, it is rather ironic that, as in similar other cases, not much have been done to encourage FDI inflow.