While presenting the
General Budget 2017-18 in Lok Sabha here today, the Union Finance
Minister, Shri Arun Jaitley proposed that the Foreign Investment
Promotion Board (FIPB) will be phased-out in the next fiscal. Expressing
concern over dubious deposit schemes, Shri Jaitley said that a Bill will
soon be tabled in Parliament to protect the poor and gullible investors.
Stating that the Government has already undertaken substantive reforms
in FDI policy in the last two years and more than 90% of the total FDI
inflows are now through the automatic route, Shri Jaitley said that the
FIPB has successfully implemented e-filing and online processing of FDI
applications and now reached a stage where FIPB can be phased out.
Therefore, FIPB will be abolished in 2017-18, he added.
Pointing out that there is an urgent need to protect the poor and
gullible investors from dubious deposit schemes, operated by
unscrupulous entities, the Finance Minister said that a draft bill to
curtail the menace of illicit deposit schemes has been placed in the
public domain and will be introduced in parliament shortly after its
finalisation. This Act will be amended in consultation with various
stakeholders, as part of our ‘Clean India’ agenda, he added.
Dealing with the markets, the Finance Minister proposed that high net
worth NBFCs can also now participate in IPOs just like the banks and
insurance companies. Shri Jaitley said he proposed to allow systemically
important NBFCs regulated by RBI and above a certain net worth, to be
categorised as Qualified Institutional Buyers (QIBs) by SEBI at par with
the banks and insurance companies, making them eligible for
participation in IPOs with specifically earmarked allocations. This will
strengthen the IPO market and channelize more investments, he added.
Shri Jaitley said that a common application form for registration,
opening of bank and demat accounts, and issue of PAN will be introduced
for Foreign Portfolio Investors (FPIs). SEBI, RBI and CBDT will jointly
put in place the necessary systems and procedures. This will greatly
enhance operational flexibility and ease of access to Indian capital
markets. The commodities and securities derivative markets will be
further integrated by integrating the participants, brokers, and
operational frameworks, he added.
In effort to improve the ease of doing business, the Finance Minister
said the process of registration of financial market intermediaries like
mutual funds, brokers, portfolio managers, etc. will be made fully
online by SEBI. Steps will be taken for linking of individual demat
accounts with Aadhar, he added.
To check bank NPAs and enhance capital flows into the securitisation
industry, Shri Jaitley said that the listing and trading of Security
Receipts issued by a securitisation company or a reconstruction company
under the SARFAESI Act will be permitted in SEBI registered stock
Stating that in the Financial Sector, the Government’s focus is on
building stable and stronger institutions, Shri Jaitley said this thrust
will be continued with several new measures as part of the reforms
agenda. Shri Jaitley said that the Cyber security is critical for
safeguarding the integrity and stability of our financial sector and a
Computer Emergency Response Team for our Financial Sector (CERT-Fin)
will be established. This entity will work in close coordination with
all Financial Sector Regulators and other stakeholders, he added.