NRIs
all over the world may no longer enjoy the special benefits on investments if
the Ministry of Finance and RBI have their way. The present FDI policy states
that investments by NRIs are not subject to any sectoral restriction if it is
not to be repatriated back. The RBI has proposed to scrap this policy all
together as it fears it could bring foreign investment into restricted sectors
or above the limits prescribed. According to the sources the RBI has suggested
that NRIs should be allowed to invest only under the repatriable route as the
other foreign investors and comply with the various restrictions.
The
Finance Ministry has forwarded the proposal to the ministry of overseas affairs
that deals with the NRI affairs. Experts have validated the concerns of the RBI
and the North Block. They say that since the government does not look into the
source of funds, NRIs can be used as a front to invest unhindered into any
sector. Apart from that investments made by the NRIs under the non-repartiable
route are not reported to the RBI and escape the regulatory radar.
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