What difference will it make if the project monitoring group (PMG) under the Cabinet secretariat is moved to the Prime Minister's Office? Industry players and government officials say the mechanics will not change unless the Union government takes major policy decisions.
"The projects are stuck because of lack of decisions and policy matters. For instance, coal and power projects are not moving due to unavailability of coal. New land is difficult to acquire owing to stringent provisions of the Land Acquisition Act. Same can be said for mining, where an Act is still under consideration," said a senior official, on condition of anonymity.
"Otherwise big-ticket projects are not taking off mainly due to inter-ministerial matters and issues at the states level. But they are being addressed," the official added.
Of the 494 projects worth Rs 24.68 lakh-crore accepted by the PMG since its inception in July 2013 under the Congress-led United Progressive Alliance government, 199 projects amounting to around Rs 7 lakh crore have received the go-ahead from all the central and respective state departments. Another 225 big-ticket projects with a total value of Rs 13 lakh crore are not moving because of 570 issues pertaining to clearances from the environment ministry, corporate affairs ministry and state civic agencies. Rehabilitation and compensation of those displaced from their lands continue to be another major reason behind the stagnation.
"Under the direct supervision of Prime Minister Narendra Modi, the PMG will get more teeth," said Chandrajit Banerjee, director general of Confederation of Indian Industry (CII). "The PM will get first-hand information of all the projects and his office will ensure things actually take off," he added.
The move has come at a time when the economy is showing tangible signs of recovery and the Union government is trying to improve the investment scenario through various means, including Modi's ambitious "Make in India" plan. Earlier this week, the Cabinet cleared Ordinances in the insurance and coal sectors following a logjam in the Upper House. Also, the Cabinet is learnt to have asked the rural development ministry to ready a draft to make changes in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, through the same route of Ordinance.
D S Rawat, secretary-general of Associated Chambers of Commerce & Industry of India, said currently investments have dried up and sectors such as mining, cement and steel are in deep trouble.
"No new investment is coming on the ground and existing projects are not being implemented as they are held back in one ministry or the other. There should be a high-powered committee, which clears all the investments at once, and investors should not go to any ministry for any clearance after that," he said.
Rawat believes the PMG has not performed the way it was expected, and unless the government is able to generate domestic demand no investor would be willing to put his money. The government official quoted above disagrees, saying they have already resolved issues regarding 199 projects and seriously pursuing each project irrespective of the size.
"We have automated many things and are making all the clearance related issues online. As of now 21 processes are already online and we hope the remaining (close to 100) will be online by March 2015," the official added.
Currently, the PMG calls meeting of all stakeholders, including officials from various ministries and investors to sort out issues. Sometimes the PMG, which is at present headed by a joint-secretary level officer following the promotion of Anil Swarup as coal secretary, officials travel to states and hold meetings with the respective chief secretaries to iron out the issues. Every meeting is electronically recorded with follow up dates and deadlines.
The official agreed that the PMG has certain limitations and it has been referring all policy related issues to the ministers concerned, but with the PM at the helm, things are expected to move swiftly. The officials are still awaiting an order from PMO that will detail change in reporting and working of the PMG.