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Journalism of Courage
Keeping the government’s goal of attracting $150 billion of FDI in mind, the Investment Commission chaired by Ratan Tata has asked the government to provide labour flexibility, remove or reduce restrictions on sectoral caps as well as promote SEZs for key sectors in order to boost investments in the country.
In a report submitted to Prime Minister Manmohan Singh today, the commission says that the government needs to remove or reduce restrictions on sector caps on all sectors other than those considered strategic. The report asks for the automatic route for all investments within the sector cap.
It has also asked the government to provide a level-playing-field in sectors which are dominated by PSUs and establish an independent central regulatory commission that should be headed by a chief commissioner who is appointed by the President or the Prime Minister.
On labour, the report asks the government to ‘‘provide labour flexibility by removing the requirement of state government approval from chapter V-B and permitting Contract Labour in all areas’’. For SEZs, the commission says that the government should first promote SEZs for key sectors and then redefine norms on the basis of scale, investment quantum/levels and sector focus.
Apart from these, it has also asked the government to provide long-term visibility and consistency of policy and reduce the number of procedures to ensure greater inflows into the country.
The commission has also asked the government to eliminate any scope for discretionary interpretation and establish a VAT like empowered committee framework to sort out centre-state policy issues that need urgent reform.
In the report, they have also pointed out inflexible labour laws and bureaucratic delays, discretionary interpretation, vested interest, bias and subjective practices as factors holding back investments flows.
In fact, the Commission has singled out the approval process adopted for getting clearances from the ministry of environment & forests as problem area.
In some of the other recommendations made for the government, the commission has identified the need to create a special high-level fast track mechanism for priority sector projects. It has also said asked the government to enhance the availability of skilled manpower for sectors like biotechnology, automotive engineering, textile, engineering, IT. Here, the commission recommends the government to establish new private educational institutes with international collaborators.
For urban infrastructure, it asks the government to facilitate upgradation by having a directly elected mayor in key cities—on lines of what is done in China and the US.
