Government bodies and agencies are important segments of the UPSC exam polity and governance sections. In this article, you can read all about the now-defunct Foreign Investment Promotion Board for the IAS exam.
The Foreign Investment Promotion Board (FIPB) was a national agency under the Government of India that offered a single-window clearance for FDI applications which did not come under the automatic route. It was under the Ministry of Finance and the Finance Minister was in charge of the FIPB. In May 2017, the Union Government decided to phase out the FIPB and it was abolished as announced by the Union Finance Minister Mr Arun Jaitley in the 2017-18 budget speech in the Parliament.
Before it was abolished, the FIPB was the most important body for FDI approvals as it could consider applications below Rs.3000 crore. Above this amount, the Cabinet Committee on Economic Affairs considered the application for FDI.
The body was first established in the nineties after the government initiated economic liberalisation reforms.
FIPB held its last meeting on 17th April 2017.
- FIPB Chairman – Secretary of the Department of Economic Affairs, Ministry of Finance
- Secretary of DIPP
- Secretary of the Department of Commerce
- Secretary of Economic Relations
- Secretary of the Ministry of External Affairs
- Secretary of the Ministry of Overseas Indian Affairs
- The board could co-opt secretaries to the GOI and prominent officials of banks, financial institutions, and experts in commerce and industry, on a need basis.
The FIPB performed the following functions before it was abolished:
- Quickly approve FDI proposals.
- Review FDI policies and help set up transparent guidelines that encourage FDI into different sectors.
- To examine the implementation of the various proposals that it had approved.
- To encourage FDI into the country by establishing contracts with international companies and inviting them to make investments in India.
- To communicate with the government and industry to augment the inflow of FDI into the country.
- To identify other sectors that need FDI.
India’s opening up of many sectors for foreign companies to start a business in India reduced the utility of FIPB. After the abolishing of the Board, individual departments of the government have the authority to clear FDI proposals in consultation with the DIPP which will also issue the standard operating procedures for processing applications.
The Foreign Investment Promotion Board or FIPB, although abolished, is nevertheless an important concept to understand in terms of economy and polity for the UPSC exam.
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