A super arbitrator or a super facilitator?
The efficiency in Government post to curtail the subjectivities of the ‘whims and fancies’ of concerned ministries while formulating the investment plans for the region. In this regard government with the recent slew of reforms has come up with a novel ideation.
The discretionary and even regulatory power of individual ministries are likely to come under serious attack with the National Investment Board (NIB) led by Prime Minister Manmohan Singh ser to assume the role of a super arbitrator over and above merely expediting clearances for major infrastructure projects. A senior Finance Ministry official said that aggrieved companied with strong legal grounds to establish that their applications for infrastructure projects.
A senior Finance Ministry official said that aggrieved companies with strong legal grounds to establish that their applications for infrastructure projects have been arbitrarily delayed or even rejected by the Ministry or Department concerned can directly approach the NIB for clearance. “This is a frontal attack on the use of discretionary powers by individual ministries. It will go a long way in eliminating red tape, reduction litigation and also bring back investment,” the official said.
What is NIB & What are its Objectives
• According to a Cabinet note prepared by the Department of Economic Affairs (DEA) for presentation this week, the NIB will be constituted as an empowered Standing Committee of the cabinet under the chairmanship of the Prime Minister, Carrying the authority of the government with key Ministers like Finance and law & Justice as members.
•The NIB will be supported by a small dedicated secretariat in the DEA which will identify key projects that require continual monitoring . The initial focus will be on investment upwards of Rs.1,000 crore in roads, mining (especially coal ) , power , petroleum and natural gas, ports and railway projects.
•The one Ministry that is likely to fact the sharp end of the NIB is Environment and Forests, with officials telling they apprehend efforts will be made to overrule them even on projects that so not merit clearance on environmental grounds.
•The stated purpose of the NIB will be to take over the process of granting licences, permissions and approvals whenever the competent authorities fail to act in time. This is intended to prevent adhocism.
•According to the official estimates, over Rs. 2 lakh-crore worth of projects in just two sectors – roads and petroleum are stuck for want of statutory and regulatory clearances in different ministries. This is creating a huge infrastructure deficit.
•According to the Cabinet note , the Process of granting refusing approvals to FDI proposals route has become quicker after the setting up t the Foreign Investment Promotion Board (FIPB) and the NIB is expected to have a similar benefit on granting / refusing approvals / Clearances to key projects , especially in the infrastructure sector.
•The NIB will prescribe difference time limits for requisite multiple approvals in consultation with the ministries and if they renege on these deadline, “ the authority of the concerned Ministry / Department would stand transferred to the NIB for taking the decision under binding rules and regulations…,” the note states.
Two basic set approvals
Detailed analysis of the delays indicates that there are two basic sets of approvals/clearances which need to be addressed. “ The First is regulatory approval accorded under the relevant law as exemplified by the Environment Clearance and forest Clearance . A time frame may have been prescribed under rules for some of the clearance but delays often occur because of the inadequate administrative arrangements to facilitate/support the procedure for timely grant/ refusal of clearance . The second is purely in the realm of administrative decisions, with each step consuming several days or weeks. Closer supervision and monitoring would considerably reduce the time taken for such approvals,” the note states.
The NIB seeks to institutionalize a system which both monitors the multiple avoidable implements emerging from the Central Government ministries/departments while taking necessary action to expedite these approvals.
Every novel idea has its own ‘circuitous’ route as far as its approval its concerned.
With the discretionary power moved from ‘Men in power’ (read Ministers), certainly there will be backlash from them. We also have to wait and see how the same advances in an era when every such step of the government is seen with an instant sale-out in the hands of the so-called alleged powerful lobby of investors.