The Prime Minister is likely to come out with a paper on National Investment Board, said Finance Minister P Chidambaram on Saturday. He was speaking at the launch of the book ‘Bank for the Buck’ on the success story of HDFC Bank in Mumbai.
“We have identified hurdles for investment under 5 heads - land, environment, fuel supply, finance, state approvals,” Mr Chidambaram said.
The proposed board will get over hurdles in sectors where government is dominant player or decision maker, he explained. “Hope it will emerge almost as I had envisaged,” the Minister added.
Concerned over the delay in implementation of mega infrastructure projects, Mr Chidambaram had, in September, proposed a Prime Minister-headed NIB to quickly clear projects. Several large projects involving investments of Rs. 1.5 lakh crore are being held up because of delay in statutory clearances.
The NIB aims to provide a single-window clearance for large projects that today are bounced from one ministry to another for various approvals, a process that can sometimes take years. A typical infrastructure project requires clearances from 19 federal ministries and on an average 56 permissions on issues ranging from the environment to defence. The whole process takes up to 24 months.
The Finance Minister also remained optimistic about pushing up investment in the country. With enough domestic demand to keep economy growing at 5.5 per cent and indicators of faster pace of growth for the global economy in 2013, this is the best time to speed up investment, Mr Chidambaram reasoned.
“This is the best time to invest in new projects as the private and public sector is sitting on huge piles of cash,” he added.
“Our intention is to kick start investment cycle… Flame of reform is still alive,” he said.
At a meeting of the Planning Commission in September, Mr Chidambaram had proposed that NIB's authority be extended to proposals/projects in which the investment is above a certain threshold.
Earlier in June, Prime Minister Manmohan Singh had approved the setting up of an investment tracking system to ensure speedy implementation of mega projects envisaging an outlay of more than Rs. 1,000 crore.
While it was expected to win swift passage through the cabinet last month, it has yet to make it on to the weekly agenda amid bickering between the finance and environment ministries over its powers, and an apparent reluctance to proceed without consensus.
Investors and economists say the NIB should be a top priority for the government given the regulatory delays holding up projects worth nearly Rs. 2,00,000 crore in the road, power, coal and mining sectors alone.
"NIB, NIB, NIB," Rajiv Lall, managing director of infrastructure financing firm IDFC Ltd told Reuters on the sidelines of a World Economic Forum meeting last week, when asked what reforms the government needed to carry out next.
Poor infrastructure is often cited by economists as one of the biggest obstacles to more robust economic growth.
With inputs from Press Trust of India, Thomson Reuters