Govt to review, simplify FDI policy to facilitate LIC IPO: DPIIT secy

The government is working towards further review and simplification of the foreign direct investment (FDI) policy to facilitate the proposed initial public offering of the Life Insurance Corporation (LIC), Department for Promotion of Industry and Internal Trade (DPIIT) secretary Anurag Jain said on Thursday.

The final decision will be taken by the Cabinet.

The industry department is working together with the finance ministry’s department of financial services (DFS) and department of investment and public asset management (DIPAM) towards a successful listing of the life insurer on the domestic bourses, which is expected to be the largest in India. Both departments have pointed out that the policy in its current form may not be conducive for proposed investors.

“We are working on further simplification of the policy, which is needed urgently as we need to do disinvestment…We have had 2 rounds of discussions and we are now on the same page. We are in the process of drafting those changes in the policy. Will go to the Cabinet after that,” Jain told reporters.

Currently, FDI of as much as 74 per cent is permitted in most Indian insurers. However, the rules don’t apply to because it is a special entity created by an act of parliament.

The Reserve Bank of India defines FDI as purchase of a stake in a listed company that’s 10% or larger by an individual or entity based abroad, or any foreign investment in an unlisted firm. The clearance for FDI in will not just allow global funds to participate in the IPO but will also open doors for a significant stake purchase after the listing.

E-commerce policy

Jain further said that has almost finalised the much awaited e-commerce policy and has been circulated to other departments for consultation. Apart from that the government will not come up with any further clarifications on the FDI policy on e-commerce.

“Our stand on ecommerce is clear. FDI is allowed in the marketplace model and not in the inventory model. There will be no change in that,” he said, addin that the department is also working towards finalizing a national retail trade policy.

Startups

Going ahead, the government is focused on creating 20,000 new jobs in the startups space by registering 50,000 new startups in the system over the next four financial years.

As many as 60,000 government-registered startups have created 6.5 lakh jobs in the country. The figure comes to 11 jobs per startup, Jain said.

“The startup movement is taking deep roots. What is interesting is that 45 percent of all registered startups are from tier II and tier III towns,” he added.

WPI base year

will also launch a new wholesale price index, with a base year of 2017-18. The current base year is 2011-12.

“WPI reflects a particular basket of consumption that has changed over a period of time. We need to tweak it in consultation with relevant stakeholders so that it reflects the reality,” Jain said.

Omicron threat and Oxygen

As far a resurgence in Covid-19 cases is concerned, Jain said that it may not have a major impact on the economy, barring a small blip in growth, with people being more prepared to deal with the pandemic, as well as a large chunk of population getting vaccinated.

The government has also been able to ramp up the oxygen production capacity, amid a rise in the number of cases. “If required, we can have 19,000 MT oxygen per day…we will be in a position to meet the demand (if the need arises),” he said.

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