Government sources said that the Great Indian Railway company has been permitted to set up a joint venture company for the purpose by investing Rs 7.25 crore, which would be equal to 51 per cent of the paid-up equity of the company.

The joint venture company would implement the concept of a luxury train service in the northern and southern parts of the country. Indian Railways would be finalising the circuits and the Indian partner in the venture would be identified later, sources added. This was part of the 38 proposals approved by the Board today envisaging a foreign direct investment inflow of Rs 177 crore, sources said.

The other proposals included that of Modi Xerox in which the FIPB allowed the company to merge two of its joint venture companies - Modi Xerox Ltd and Modi Xerox Financial Services Ltd - andacquire the 20 per cent stake held at large by the public.

The Board also allowed Motorola to divest its ten per cent share-holding in Modicom Network to Mauritius-based Distacom. Sources said that the company has also been allowed to hike its paid up capital from Rs 465.68 crore to Rs 552.68 crore.

Telefonaktiebolaget lm Ericsson, a subsidiary of Ericsson has been allowed to set up a joint venture company in the country with 49 per cent foreign holding to manufacture switching and transmissions systems.

FIPB also gave a go-ahead to Majestic Auto to manufacture two-stroke engines up to 500 cc capacity through its joint venture company. Majestic Auto's foreign partner in the collaboration is Briggs and Stratton.

IFC Washington, along with two other firms Shorebank Corp, US and Stichting Fonds of Netherlands were allowed to pick up 38.6 per cent stake in a joint venture non-banking finance company, which would involve an FDI infusion of Rs 6.6 crore.