Cabinet clears CCI, Land Acquisition Bill

New Investment Policy for urea, cut in reserve price for 2G spectrum in 3 circles also approved

Emboldened by Parliament's vote in favour of 51% FDI in multi-brand retail, the UPA Government today gave up a big push to reformist agenda with the Cabinet clearing a much-awaited proposal to set up the National Investment Board (NIB) and amendments to the Land Acquisition Bill.

The cabinet also approved the re auction of 1800 Mhz spectrum in three circles at a base price which is 30% lower than what was fixed by the government in the auction concluded just a month ago, which might help the government raise resources for its dwindling kitty.

Besides, the Cabinet Committee on Economic Affairs (CCEA) gave a nod to new investment policy on urea which might help in garnering investment worth Rs 35,000 crore.

The proposed NIB, to be now known as the Cabinet Committee of Infrastructure, will be a body to speed up various clearances for infrastructure projects above Rs 1,000 crore of projects. The body, to be chaired by Prime Minister Manmohan Singh, would be set up at a time when the Planning Commission envisages investment to the tune of Rs 56,14,730 crore  in infrastructure sector in the 12th five year plan (2012-13 to 2016-17).

Earlier, a proposal to this effect was deferred by the Cabinet after Environment and Forest Minister Jayanti Natarajan protest against the move to set up NIB, as she feared overriding powers to the body, bypassing her ministry.

Today, she said "All concerns have been addressed. I am satisfied."

Recently, Finance Minister P Chidambaram had said that there were over 100 projects, each involving investment of Rs 1,000 crore or more, that have been delayed due to various reasons.

"Our problem is not conceptualising projects. Our problem lies in getting numerous clearances and getting the project off the ground within a reasonable time," he had said.

For example, there are NTPC projects involving 11,000 mw of capacity that are stuck due to various clearances.

The cabinet also cleared the amendments to the Land Acquisiton bill, though in a diluted form.

The cleared Bill requires the consent of only 70% of land owners when the government acquires land for a public-private partnership (PPP) project. For all other types of projects, 80% consent will be required.

In its original form, the legislation, “The Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Bill”, had required 80% consent not just from landowners, but also from the dependent farm workers.

This provision was removed after protests from industry and infrastructure lobbies.

Earlier, the high base price for 2G services had prevented telcos from bidding in the circles of Delhi, Mumbai and Karnataka during the previous auction which was concluded in November, forcing the government to re auction them once again and this time at a substantially lower price. The three circles are crucial as they constitute for a substantial portion of the auction revenue for the government as well as its future earnings from revenue share.

Last month, the Government was able to sell less than 50%  of the total spectrum that was put up for the 2G auction and had raised just Rs 9,407 crore, as against its initial target of Rs 40,000 crore.

Telecom minister Kapil Sibal had indicated that currently the ministry is seeking cabinet’s approval on the reduced pricing and they plan to complete the auction process within this financial year.