In order to revamp the foreign direct investment (FDI) policy of the country, the government may set up a Empowered Group of Ministers (EGoM).

The proposed EGoM may study the Arvind Mayaram committee report, which has suggested a major change in the FDI regime. Mayaram is secretary, economic affairs department, union government.

Some reports indicate that the EGoM may be headed by Finance Minister P Chidambaram. The ministerial panel may decide on whether to raise FDI caps in defence, telecom, multi-brand retail, insurance and pension sectors.

In the next few weeks, Prime Minister Manmohan Singh and his cabinet colleagues would decide on the contours of the FDI policy, reports suggest.

The EGoM will be asked to close the issue within a specified period, as the government aims to bring in all the changes in the next revision of Consolidated FDI Policy, to be effective from October 1.

The Mayaram panel recommended raising the FDI cap in the defence, telecom, multi-brand retail, insurance and pension sectors. It also suggested simplifying the FDI policy structure by reducing the layers of caps.

It has recommended raising the FDI limit in the defence sector from 26 per cent to 49 per cent and in telecom from 74 per cent to 100 per cent.