New Delhi, Dec. 13: The Union cabinet today approved a plan to set up an investment board that would monitor and advise ministries on expediting projects with investments of Rs 1,000 crore and above. It decided to name the body the Cabinet Committee on Investments (CCI).
The committee, to be chaired by Prime Minister Manmohan Singh, will grant overriding permissions to big-ticket infrastructure projects in order to cut red tape and delays. Its functioning will be similar to arrangements in Japan, Indonesia, Malaysia and Thailand.
A cabinet note by the finance ministry said: “Projects with investment of Rs 1,000 crore or upwards in sectors such as roads, mining, power, petroleum, natural gas, ports and railways shall be monitored by the board.”
The CCI is being set up by amending the “transaction of business rules” that govern the functioning of the cabinet and ministries.
Officials said the committee would define timelines for clearances for central ministries and regulatory bodies. The committee will have the powers to call the files and cut through red tape to grant clearances. For state clearances, too, timelines will be set. Even as state timelines cannot be enforced, the CCI secretariat will follow up and see to it that state regulators give faster clearances.
The CCI will have a permanent secretariat reporting to the Prime Minister’s Office, which will oversee its functioning. The committee will also consider and review representations from aggrieved applicants (companies) whose projects are delayed or rejected by ministries or departments concerned.
The cabinet nod comes after it deferred the decision to establish such a panel last week because of procedural wrangling between ministries.
The Prime Minister’s Office had decided to go ahead with the setting up of such an investment board in November, despite objections by the environment ministry.
The environment ministry felt its powers would be curbed by the board, while the finance ministry pushed for it. To stop the inter-ministry rivalry, the PMO named the panel the Cabinet Committee on Investments and placed it under the supervision of the cabinet secretariat instead of the environment or finance ministries.
The plan for the CCI got off the ground after public sector chiefs told Singh, at a meeting held to step up investment, that the biggest hindrance to their growth plans was the regulatory environment. The idea for the board was floated by finance minister P. Chidambaram. Most ministries, including steel and industry, and the Planning Commission favoured a defined timeline for clearances.
Typically, an infrastructure project requires clearances from 19 Union ministries and 56 authorisations on issues ranging from environment to intelligence bureau, besides approvals from the respective state and municipal authorities. The entire process could take up between 24 months and five years.
Officials said some 700 projects with investments of Rs 7,500 crore were stuck. The Prime Minister had said at a meeting of all ministers held last month that there was a need to take “quick decisions” to fire the growth engines in steel, power, road and coal.
Industry welcomed the decision to set up the CCI, and Ficci president R.V Kanoria said, “At a time when the manufacturing sector has slowed down, this single decision will act as a major stimulus for the economy. Given the size and diversity of India, there is a need for an institution which has the ability to get things done in a time-bound manner.”