Foreign Exchange Management (Non-debt Instruments) Rules 2019
- October 7, 2021
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Foreign Exchange Management (Non-debt Instruments) Rules 2019
Subject – Economy
Context – BPCL sale: Centre allows 100% foreign investment
Concept –
- The Finance Ministry has added a new provision to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 to facilitate strategic disinvestment of Bharat Petroleum Corporation Limited (BPCL).
- Foreign investment up to 100 per cent under the automatic route is allowed in case an ‘in-principle’ approval for strategic disinvestment of a PSU has been granted by the government
- This new provision is in addition to the existing one that prescribes FDI up to 49 per cent in petroleum refining PSUs, without any disinvestment or dilution of domestic equity.
- The FDI cap of 49 per cent in oil refineries was proving to be a hitch in the government’s attempts to sell its near 53 per cent stake in BPCL, which is the country’s second-largest refiner.
- The planned stake-sale is part of the government’s effort to raise ₹1.75-lakh crore from disinvestment of public sector companies and financial institutions in 2021-22.
To know about Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules 2021, please click here.
To know about Strategic Disinvestments, please click here.