The Union Government has released the fourth edition - Circular 2 of 2011 of the consolidated FDI policy document. The government has introduced some significant changes in this edition, including permission for overseas investment in beekeeping, share-pledging for raising external debt and notified the revised FDI limit on FM radio at 26 per cent against the earlier 20 per cent.

The government also allowed 100 per cent FDI under the automatic route in industrial parks for bio-tech and pharmaceutical research. This will augment research and development infrastructure in these areas and will help in expansion of production facilities. Further, conditions for FDI in respect of construction of old-age homes and educational institutions have been eased. These will not be subject to minimum and built-up area, capitalisation and lock-in period norms as applicable for the construction activities. This apart, the policy has opened honey beekeeping to FDI. Thus international best practices will come in the country to upgrade the product. The move will help food firms, engaged in honey-processing.

During the month, on the recommendations of the FIPB, the government ratified a total of 12 FDI proposals which are expected to take in around Rs 242.88 crore. The cleared proposals include one by Allcargo Global Logistics entailing FDI worth Rs 141.36 crore and another by Indian Rotorcraft to carry out assembly of military and civil helicopters. Allcargo Global has been given ex-post facto clearance for issuance and allotment of optionally convertible warrants to raise funds for setting up multi-modal transport operations and inland container depot/container freight stations as part of its logistics business. Likewise, Mumbai based Indian Rotorcraft had also sought permission to induct foreign equity to carry out the business of final assembly of military and civil versions of helicopters. When implemented, the proposal is envisaged to attract Rs 17.42 crore as FDI. However, the government deferred decisions on 15 FDI proposals, including Bangladesh based Rahimafrooz Batteries, and rejected seven applications.

This apart, FDI inflow in India declined by 38 per cent on Y-OY basis in July 2011 to $1.09 billion (approx Rs 5,286.5 crore). The country's FDI stood at $1.78 billion (approx Rs 8,633.5 crore) in July 2010. During April-July 2011, FDI went up by 92 per cent to $14.54 billion (approx Rs 70,519 crore) from $7.56 billion (approx Rs 36,666 crore) in the corresponding period in 2010.