P. Chidambaram with other cabinet colleagues in New Delhi on Saturday. (PTI)
New Delhi, Sept. 15: Finance minister P. Chidambaram has called for setting up a National Investment Board headed by Prime Minister Manmohan Singh that would fast-track large investment projects.
Chiefs of public sector units had complained that red tape had been holding up key project clearances.
“The NIB’s authority should extend to proposals/projects where the investment is above a certain threshold, say, Rs 1,000 crore. Once the final decision is taken by the NIB, no other ministry or department or authority should be able to interfere with that decision or delay its implementation,” Chidambaram told a meeting of the full Planning Commission.
PSU chiefs had pointed out at a meeting held earlier this week that multiplicity of windows where they and private sector CEOs had to go for clearances meant that big-ticket port, road, highways, railways, steel and power projects remained on the drawing board for years.
Chidambaram regretted that under the present dispensation, “a truly ‘final’ decision (on projects) does not emerge for many years”.
He said outlays in the 11th Five Year Plan fell short of targets because of failure to achieve physical targets.
One of the prime examples that raised the hackles of the finance ministry was the case where the environment ministry suddenly came up with a go-no-go policy that put half of India’s coal reserves in a no-mining zone, negating all previous cabinet and inter-ministerial clearances.
Chidambaram pointed out that power generation capacity during the plan period was 55,000MW against the target of 78,700MW.
Similar shortfalls were witnessed in other key sectors such as coal, crude oil, gas and railways.
In order to overcome these problems, Chidambaram said, “I would urge that we seriously consider the need to set up a mechanism at the cabinet level to take final decisions on major investment proposals, especially in infrastructure.
“The authority to take the final decision should be vested in an NIB to be chaired by the Prime Minister and the allocation of business rules should be amended to create such a mechanism,” he said.
At present, the government’s business rules allocate the authority to take the final decision to one or more ministries.
Chidambaram also called for direct cash transfer of subsidies in food, fertilisers and petroleum by the end of the 12th Five-Year Plan period that began April 1, 2012, to bring down the subsidy bill.
“I would urge that by the end of the 12th Plan, these three major subsidies be rolled out across the country through direct cash transfers to the beneficiaries,” the minister said.