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PM keeps key resources ministries within reach

The Modi government has ambitious plans for more investment in the water sector as well as expand the scope of mining industry.

By: ENS Economic Bureau | New Delhi | Published: May 28, 2014 12:36:24 am

Prime Minister Narendra Modi has brought the entire lot of ministries dealing with natural resources effectively under his direct supervision in the portfolio allocations. This includes petroleum and natural gas, coal and power which are with ministers of state. While water and even mines are with Cabinet-level ministers, the accent is clearly on ensuring that as the government gets down to faster allocation of resources, there are no trip wires on the way.

New power and coal minister Piyush Goyal said there would be a marked departure from the “business-as-usual” approach. He said, “The three ministries have been brought under one umbrella so that we can all work in tandem, hopefully cut down some costs and ensure that the objectives which he (the Prime Minister) has laid down and the delivery mechanism to achieve those objectives can be streamlined.” Allocation of coal, iron ore and spectrum had run into controversies during the UPA-II regime. Goyal, on his first day in office, said the Prime Minister is keen that coal and power ministries achieve turnaround by “following correct procedures without any discretionary exceptions.” He added this is necessary to remove the bottleneck from these sectors.

A single minister overseeing these three ministries is expected to reduce time and cost overruns of projects which are stranded mainly because of delays in inter-departmental differences. Former power secretary Anil Razdan said management of these ministries would reduce a lot of conflict. “This measure will strengthen the synergy. When ministries are separate, we take adversarial role, a common minister as arbitrator will take the most expeditious and pragmatic decision.”

Buffeted by the charges of crony capitalism, Pranab Mukherjee, during his term as the finance minister, had appointed a commission under Ashok Chawla to suggest ways to auction the resources. The only sector among the resources where the government has consistently followed the auction route is oil and natural gas under the New Exploration Licensing Policy. But here too there have been charges that production sharing contracts have been biased in favour of private parties.

The Modi government has ambitious plans for more investment in the water sector as well as expand the scope of mining industry. With Uma Bharti and Narendra Singh Tomar, respectively, handling the ministries, here too Modi is expected to have a decisive say.

“For power, a large part is made up by coal and even the renewable energy is a form of energy so merging would also make the decision process smooth,” said Kuljit Singh, partner-infrastructure practice at Ernst & Young.

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