NEW DELHI: Foreign direct investment (FDI), which was facing the heat on security grounds, specially in the case of infrastructure sectors, appears to have got a breather. Finance minister P Chidambaram told reporters on Friday, the government was not planning any new law to screen such investments through the National Security Council Secretariat. India had recorded a 72% year-on-year rise in FDI inflow in ’05-06. The possibility of a new legislation was being discussed, following the rejection of some FDI proposals from Chinese companies.
Mr Chidambaram said FDI proposals will continue to be dealt with on a “case by case” basis and will only be subject to current laws. “Unless there are overwhelming reasons, we do not intend to keep out any proposals,” he added.

The minister also said the government will introduce the bill to amend the Insurance Act, including raising the FDI cap for the sector to 49%, in the winter session of Parliament.

In a wide-ranging press conference to mark the achievements of the finance ministry, mid-way through the UPA government’s tenure, the minister said the pace of reforms needed to pick up. Without referring to any sector, the minister said the economy may be losing out on some opportunities, which needed to be corrected. “Our reforms are marked by gradualism, but we may need to inject a sense of urgency into them,” he said.

Chidambaram said the status quo on Participatory Notes will continue, despite the Tarapore committee’s recommendation to phase them out within a year from the stock markets. He said all opinions will be taken on board before the government decided on a roadmap to convertibility. He also said market regulator Sebi has issued guidelines on the Indian Depository Receipts guidelines.

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