The government has started moving at a fast pace on the critical steps envisaged to improve the investment scenario in the country.
As part of this whole exercise, finance ministry has moved a cabinet note for constitution of the National Investment Board (NIB) within two weeks of the body being proposed by finance minister P Chidambaram at the full Planning Commission meeting on September 15.
As per the proposal, Prime Minister Manmohan Singh would be heading the board which will ensure fast clearance to the major infrastructure projects.
A senior finance ministry official said the ministry was moving the cabinet note today for constitution of NIB headed by the Prime Minister.
The official pointed out that no threshold level was fixed at this juncture for NIB to take up the infrastructure projects. “It could be Rs 1,000 crore or Rs 5,000 crore. NIB will decide the threshold limit from time to time,” he added.
Officials pointed out that the proposal was expected to get the cabinet nod quickly as Prime Minister himself had outlined on several occasions in the recent past the necessity of faster clearance to the infrastructure projects for improving the dampened investor sentiment and boost growth.
The key question, however, remains whether NIB will also be the deciding body for the projects with foreign investment as currently this job is being done by the Foreign Investment Promotion Board (FIPB).
Chidambaram had expressed serious concern over delay in implementation of the infrastructure projects at the full plan panel meeting and had suggested creation of NIB to improve the situation.
At the meeting chaired by Prime Minister Singh, the finance minister said that clearance by the NIB should be the final decision and no interference by any other authority should be entertained.
“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 the infrastructure sector and, in particular, in the sectors that I have mentioned above. At present, the Allocation of Business Rules allocates the authority to take the final decision/decisions to one or more ministries. In fact, this is the reason why a truly “final” decision does not emerge for many years,” Chidambaram had pointed out.
He urged that the authority to take the final decision should be vested in NIB to be chaired by the Prime Minister and the Allocation of Business Rules should be amended to create such a mechanism.
“The National Investment Board’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 National Investment Board, no other Ministry or Department or Authority should be able to interfere with that decision or delay its implementation,” Chidambaram stressed.
