In a bid to further ease rules on foreign investments and "allow new instruments that go beyond the traditional equity shares to boost the start-up eco-system", the government is looking at doing away with the Foreign Investment Promotion Board (FIPB), the Times of India reported on Monday.

Speaking to the newspaper, Economic Affairs secretary Shaktikanta Das said: "We are looking at other sectors which can be put on the automatic route. The gatekeeper under FEMA (Foreign Exchange Management Act) will be RBI (Reserve Bank of India) and the gatekeeper for other sectors will be the regulators. We are looking at a situation where eventually gets phased out."

"The idea is to move towards more opening up and to have more and more process driven activities and methods. In fact, today nobody visits North Block for clearance because everything is online. The application is online, the clarifications, if any, are online, the consultations with ministries are also done online," Das added.

According to the report, while referring to the proposed regime for non-banking finance companies (NBFCs), Das said that today, in segments other than 18 groups of NBFCs, investments require approval. This system, according to the report, will be discarded soon and entities under the regulation of the Securities and Exchange Board of India and the insurance regulator will not require any further clearance for investments.

However, while speaking to ToI, Das acknowledged that there are sectors like defence or telecom where "security considerations" require FIPB clearance and dismantling the body might not occur overnight.

"As it stands today there are sensitivities that need to be taken into account. These are very sensitive and delicate issues which have to be very carefully thought through," he said.

Das told ToI that by putting more sectors under the automatic route – which means investors only have to inform RBI once they invest – the current government was moving towards improving the ease of doing investment and that this tied in with the Modi administration's objective of "minimum government, maximum governance".

"There are no turf issues and there are no issues of shedding powers. Usually it is said that government departments want more powers. By putting it on automatic route we are improving the ease of doing business, we are making it easy for investments to happen, we are facilitating quick job creation," Das told ToI.

On the topic of hybrid instruments for foreign direct investment, Das said that discussions on the matter had been initiated and measures would be implemented "soon". Das said, "Today, you are either coming as equity or any FII (foreign institutional investor) investment in excess of 10%. Hybrid would mean basically a convertible instrument. It will help unlisted companies and start-ups. There are a lot of investors who want to come in. There has to be enough flexibility between the recipient company and the investors to negotiate the terms of investment and easy pull out. It will help the promoters in India to access funds from abroad, particularly equity money."