FIPB going paperless for greater ease of investing

All FIPB records will now be digitised; old and unnecessary files will be weeded out

Come January and the Foreign Investment Promotion Board (FIPB) will go paperless for submission of applications, granting of approvals and keeping various records. As Prime Minister Narendra Modi promises to give a push to online services for investors, the Public Private Partnership (PPP) cell in North Block will also become largely digitised later this month.

These moves by the finance ministry will go a long way in improving the ease of doing business in the country, a parameter on which India currently lags behind much of the world. The initiatives are also expected to bring down costs and result in faster disposal of applications.

At present, an applicant seeking FIPB nod for single-window clearance on FDI proposals is required to submit at least two dozen documents with multiple hard copies at the facilitation centre in North Block.

Sometimes additional documents are sought by ministries, which delays the process. In the new system, a clear checklist of required documents would be provided. Though the FIPB had allowed online submission of documents earlier, hard copies were still mandatory.

"A new mechanism is being developed in which FIPB proposals would be submitted in digital form either in a DVD or online. All concerned ministries and departments would be given a login ID to directly access these files. This will bring down the average time for an FIPB clearance from about five weeks to three weeks," said a finance ministry official who asked not to be named.

Applicants will also be able to check the status of their application online. Approval letters will be given online and the hard copy will follow. At present the communication between the government and the applicant, even if it is for follow-up queries, is through email, sometimes not even official email. It is a significant improvement over communication through post until a few years ago.

"Currently, only the official sending mail knows about it and later the information is shared with other members of the FIPB. Now there will be institutional memory and the information will be shared simultaneously with everybody," the official added.

Besides, all FIPB records will be digitised, while weeding out old and unnecessary files. This will display all past records of a company at the click of a mouse.

Finance Minister Arun Jaitley will launch a facilitation centre in North Block shortly for receiving digital files.

However, the website, being prepared by the government's web services organisation, National Informatics Centre, may not be formally launched before January.

For 100 per cent export-oriented units, investment by non-resident Indians, single-brand retail and multi-brand retail, applicants may still require to file hard copies because these issues are handled by the commerce ministry. These can be handled by the finance ministry only after a change in the policy. The government has already said no to FDI in multi-brand retail, though no formal rule has been inserted in the consolidated FDI policyin this regard so far.

Also, the defence and home ministries would still be sent hard copies by the finance ministry due to security issues involved in submission of documents in electronic form.

The finance ministry is planning to revamp its PPP website and make it more interactive and help companies involved in public private partnership projects. The existing website www.pppinindia.com is likely to be updated with more relevant and useful information.

"The new website of PPP will be ready this month. People can apply online and submit documents wherever a hard copy is not needed," said another official who did not wish to be identified.

India is ranked 134 among 180 nations in terms of the ease of doing business, according to a World Bank report in 2014, three notches down from the 131st rank a year earlier.