Disinvestment obligation on foreign firms may go

Disinvestment obligation on foreign firms may go
PTI
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First Published: Wed, Aug 01 2007. 02 00 PM IST
Updated: Wed, Aug 01 2007. 02 00 PM IST
New Delhi: With a view to removing an irritant for foreign investors, the government is likely to do away with rules that put an obligation, mainly on overseas oil firms, to disinvest part of their equity to Indian investors.
The Petroleum Ministry has agreed to the proposal of the Department of Industrial Policy and Promotion (DIPP) and it would be taken to the Cabinet along with the general review of the FDI policy in September.
“The obligation to disinvest has not served any great public purpose. In most of the cases, it ended up being a bureaucratic hassle for the foreign firms operating in India,” a senior official said.
Moreover, different rules govern different companies and sectors since many of the firms were given a waiver. The government would like an equal treatment for all foreign investors, he said.
Pepsi is among the overseas firms faced with a must- disinvest clause.
The Department of Industrial Policy and Promotion (DIPP) has been engaged in the annual exercise of review of the FDI policy for several months and has received quite a feedback from number of ministries like petroleum, food processing and finance.
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First Published: Wed, Aug 01 2007. 02 00 PM IST