The government’s move to take upon itself the oversight of issues concerning foreign direct investment (FDI), regulation of share purchase and transfer in equity markets, etc., and purchase and sale of immovable properties by foreign investors and NRIs is at a very initial stage. The Reserve Bank of India at present regulates cross-border transactions as well as purchase, sale and transfer of properties by foreigners as part of its mandate under the Foreign Exchange Management Act (Fema). Whilst the government intends to take over this function where equity markets and properties are concerned, it has yet to formulate guidelines as to how it proposes to take this forward.
The idea is to have a single authority as against the present two. Besides, issues like foreign investment in equities or property matters like purchase, sale and transfers are policy issues and are best left to the government. The move is also intended to make it easier to do business and cut down on multiple permissions and delays. Investors will now find it easier to complete the formalities. If these intended objectives are met, it would indeed be a good move. The government has been cutting down the number of forms to be filled but a lot more needs to be done. Difficulties arise where state governments are also involved, and most state governments, do not move with the alacrity needed. There is still a lot of corruption at every level of government organisations and there is no move to curb this or end it.
