Mayaram panel on FDI, FII to finalise report by next week

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A high-level panel headed by Economic Affairs Secretary Arvind Mayaram will finalise by early next week, its report on the definition of FDI and FII, aimed at removing ambiguity on the two types of foreign investment.

"Much of the work has been done. We are on the same page. By early next week, the report (on the definition of FDI and FII) will be finalised," a government official who today attended the meeting on the matter said.

The government had set up a four-member committee headed by Mayaram to define foreign direct investment (FDI) and foreign institutional investment (FIIs) and remove the ambiguity between them.

Allaying apprehensions that the new definitions would alter ownership pattern of different companies, Mayaram had earlier this week said that new norms would not apply existing arrangements.

"We should remember that there is already a circular by the RBI and a DIPP Press Note which grandfathers everything which happens earlier. So we don't upset everything that has happened. Because ultimately policies keep changing. You cannot change history, so anything else which doesn't fall within this will be grandfathered," he had said.

The Secretary too had said the report on new FDI and FII definition is likely to be finalised by early next week.

Finance Minister P. Chidambaram in his Budget speech had proposed to follow the international practice with regard to definitions of FDI and FII.

Chidambaram has proposed laying down a broad principle that would consider a stake of 10 per cent or less in a company as FII and an investment exceeding 10 per cent as FDI.

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