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Centre must simplify FDI rules, provide tax holidays: Panel

A parliamentary panel has asked the government to simplify legislation governing foreign direct investments to reduce harassment to foreign investors and said the centre should provide tax holidays to attract more investments in core sectors like power and infrastructure.

"A full-fledged campaign should be launched, with attractive schemes like tax holidays, for heavy investments in power and infrastructure. The centre along with the state governments should strive towards simplification of legislation, proper implementation of laws and removal of red-tapism," the Parlimentary Standing Committee on Commerce said.

The committee, headed by Sikander Bakht, said it favoured a single window clearance of FDI with the approval body consisting of officials of both the centre and the state governments.

"After clearance from this body, no administrative difficulties should come in the way of foreign investors. They should be monitored and not harassed," it said.

Asking the government to examine the feasibility of opening up of other sectors for automatic route, the committee said that a specific strategy should also be formulated to increase FDI in the backward states.

"Government should also encourage the FDI in laggard states by urging the state government to improve their infrastructure and provide special incentives to FDI in backward areas," it said.

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