However, the changes will not apply to cases where there was an increase in the percentage of foreign equity and where the original project cost was more than Rs 600 crore, an official release said here today.

"Any company can henceforth infuse additional funds by way of foreign equity as a result of financial restructuring (provided there is no change in the percentage of foreign equity) and notify the same to the Secretariat of Industrial Assistance (SIA) within 30 days of receipt of funds as also allotment of shares to non-resident shareholders," it said.

This has been done keeping in view the desirability of infusion of additional funds as equity by the foreign company, leading to increased investment inflows, the release said. Earlier, for any proposed increase in the amount andpercentage of foreign holding, prior approval of Foreign Investment Promotion Board (FIPB)/government was needed.

The government has also changed the applicability of dividend balancing procedures by allowing it only to extent of incremental foreign equity in cases where it was not applied at the first instance as per the existing policy then.

The changes in dividend balancing applicability would also apply in the case of secondary market acquisitions and preferential allotment/transfer of shares to the extent of foreign equity infused in the first instance in case the activity attracted the condition as per existing policy, the release said.

The applicable date of dividend balancing would be the date of commencement of commercial production in the case of new ventures and the date of allotment of shares in the case of existing ventures.