To fast track core sector projects that are pending with nodal ministries, the government is looking at further enhancing the scope of the Cabinet Committee on Investment (CCI). Accordingly, projects that are pending with line ministries for more than three months for approval may be automatically sent to the CCI to iron out wrangles and get clearances.
“We are looking at a 90-day timeframe for the line ministry to clear the project. Otherwise, it will be taken up by the CCI,” said a senior government official.
The proposal, currently under discussion, may be finalised soon, as the UPA in its last few months tries to break away from the image of “policy paralysis” and revive investments to spur growth.
Headed by Prime Minister Manmohan Singh, the CCI was set up in January 2013 to identify and fast track mega infrastructure projects over Rs 1,000 crore that were stuck due to various administrative clearances.
A project monitoring group was also set up under the CCI in July 2013 at the insistence of finance minister P Chidambaram who had mooted a special cell to unlock investments worth over Rs 7 lakh crore by reviving 215 projects that have hit implementation roadblocks. Chidambaram had also said that 341 projects worth Rs 10.5 lakh crore were held up in red tape.
Since its inception, the CCI and the project monitoring group under its ambit has cleared more than 310 projects worth Rs 6.5 lakh crore. Cabinet secretary Ajit Seth had said recently that the CCI would soon clear another 250 projects worth Rs 10 lakh crore.
“Even though the government has little time before the general elections but it is keen to keep doing things till the last days of its term. The idea is to get the economy back on track, even if the dividends are reaped by someone else,” said another senior official.
The move, if it goes through, could give a boost to core sector projects that can face a waiting period of up to two years for as many as 56 administrative clearances from over a dozen ministries before they can start implementation.
As per the terms of reference of the CCI, it can set time limits for ministries to grant project clearances and step in when the deadlines aren’t met.
“The CCI can also take decisions regarding the grant or refusal of clearance to a project that has been unduly delayed, if deemed necessary. So this won’t need a change in mandate, just an enabling decision to activate this provision within 90 days,” the government official quoted earlier, said.
Banks too have a significant exposure to these infrastructure projects, which can turn into non-performing assets on their balance-sheets when they remain in limbo for long.
Meanwhile, industry chamber CII has also suggested that the government should halve the threshold of projects to Rs 500 crore to further expedite clearances for core sector projects.
Highlighting the role of the CCI in opening up public investments, the Reserve Bank of India projected a partial recovery in growth at five per cent to six per cent in FY15.
“As projects cleared by the CCI so far translate into investment, global growth outlook improves, and inflation softens, real GDP growth in 2014-15 could turn up into the higher reaches of this forecast range,” said the RBI in its third quarter report on macro-economic and monetary developments last month.