Clearing the clutter

The cryptic,last-minute postponement of this years first public sector issue has omitted to mention that the steel ministry refused to accept the price at which the shares of the mini-ratna company,RINL,were to be offered to investors. The price that merchant bankers have suggested in an anaemic market was below the book value of the company,which the steel minister was wary of signing on,as it could invite an audit censure. A one-off glitch is no indicator of how the remaining cases will pan out. But arguably,the proposed National Investment Board NIB will ensure these glitches are minimised.

The investor community has understood the proposed board will be the final decision-maker. The government must demonstrate this is indeed so. It must prove that this will not be another hurdle for investors to cross before their projects can take off. For instance,environment minister Jayanthi Natarajan has suggested that clearances by her ministry should also include an additional layer of biodiversity clearances apart from the four they already have to comply with. Her letter to the PM is an indication that there are few takers within the government for the plan to simplify project clearances. There are other obstacles too. Projects involving overseas money go through the Foreign Investment Promotion Board and those involving domestic money go through the Public Investment Board before they are sent up to the cabinet. Either the boards or the cabinet-level approvals must be done away with,else the NIB would be seen as simply adding a layer to shield ministers from responsibilities for their decisions.

The UPA has earlier toyed with ideas like an Investment Commission to handhold large projects and agencies like a Foreign Investment Implementation Authority,both of which disappeared in the bureaucratic quagmire. The government must ensure the new plan does not repeat past mistakes.