Finance Minister Jaswant Singh is likely to lift restrictions on foreign direct investment in a host of sectors while announcing the Budget for 2003-04.
According to government officials, the sectors where the FDI cap could be relaxed include telecommunications, banking, plantations, petroleum refining and real estate.
The officials said the N K Singh committee report on foreign investment would be accepted in its entirety by the ministerial group looking into the issue. Jaswant Singh is expected to endorse the report in the Budget.
With Arun Jaitley assuming charge as industry and commerce minister, a meeting of the ministerial group on foreign investment is expected soon.
The group has received inputs on the N K Singh report from the ministries concerned. Jaswant Singh, who chairs the group, will discuss it with the other members before taking a final decision.
The N K Singh committee had proposed increasing the FDI ceiling in airports from 74 per cent to 100 per cent, in basic and mobile telecommunications from 49 per cent to 74 per cent, in direct-to-home broadcasting from 20 per cent to 49 per cent, in petroleum refining from 26 per cent to 100 per cent, in insurance from 26 per cent to 49 per cent, and in civil aviation from 40 per cent to 49 per cent.
In sectors like plantation, real estate, advertising, paging, banking and airports, the committee had recommended eliminating the FDI caps.
Officials said the government was discussing granting industry status to plantations to attract foreign and private investment.
Significantly higher foreign investment is necessary to achieve the 8 per cent growth target for the Tenth Plan.
India is seen as having the potential to attract $8 billion FDI every year by overhauling its regulatory set-up and raising the sector caps.
Other aspects of the N K Singh report would be implemented over the next fiscal, the officials said. Enactment of a separate legislation for FDI, sprucing up India's image in markets overseas and targeting multinational companies were being studied by the Prime Minister's Office in co-ordination with the finance ministry, they added.Run-up to the Budget 2003
