The government on Wednesday issued guidelines on big-ticket changes to the foreign direct investment norms that were approved by the Union Cabinet on January 30.
It, however, remained silent on clarifying a change in norms for FDI in real estate, possibly due to fear of greater capital inflows.
The move to delink the FDI provisions from investments by foreign institutional investors in real estate under the portfolio investment scheme was expected to lead to greater stock market play in real estate scrips.
Government sources said the clarification was not mentioned in the minutes of the Cabinet meeting sent to the Department of Industrial Policy and Promotion recently.
As a consequence, a press note could not be issued. "It is not clear why the Cabinet has not cleared the proposal to de-link FDI and FII norms (in real estate)," said the official.
Interestingly, on the day the Cabinet met to approve the changes, a plain-paper background note distributed by the government said the Cabinet had approved a clarification that FII investments would be distinct from FDI and be outside the purview of press note 2 (2005).
The de-linking provisions were proposed by the DIPP.
The DIPP issued six different press notes (policy notifications by the government) covering civil aviation and petroleum and gas, besides a few other sectors.
The norms...
The first press note of the 2008 series deals with guidelines for allowing 49
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