The first meeting of the Government constituted committee to clear the
prevailing ambiguity on FDI and FII has been convened on March 19.
The four-member panel headed by Economic Affairs Secretary Arvind
Mayaram will meet here to discuss how the Budget announcement on this
issue can be taken forward and implemented.
The panel report is expected in the next 2-3 months.
Finance Minister P. Chidambaram had in Budget 2013-14 announced the
Government’s intent to follow international practice in deciding what
constitutes foreign direct investment and what constitutes foreign
institutional investment.
The Government proposes to lay down a broad principle that where an
investor has a stake of 10 per cent or less in a company, it will be
treated as FII.
In cases where the investors have a stake of more than 10 per cent, it will be treated as FDI.
Besides Mayaram, the four-member panel comprises Department for
Industrial Policy and Promotion Secretary, a Reserve Bank of India
Deputy Governor and a SEBI whole-time member.
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