The government has consulted the ministries of environment, aviation and defence among others to create a unified platform for clearances to attract more investment
New Delhi: The government will put in place a single-window clearance mechanism to provide quick approvals for development projects by the end of the month, urban development minister M. Venkaiah Naidu said.
“That is the deadline we have decided on and delays will be gone," he said on Wednesday while speaking at the World Economic Forum’s (WEF) National Strategy Day on India.
Quicker clearances are important as the country needs to attract foreign investments, Naidu said. The government has consulted the ministries of environment, aviation and defence among others to create a unified platform for clearances.
Infrastructure financing had been a sore point for the government with investors who have had bad experiences in the past unwilling to invest any more. “Past bitter experiences were due to indecision and instability of the past government and the current government is ready to relax norms," Naidu said.
Banks have also become cautious as at least 25% of their non-performing assets are related to infrastructure projects. “Though we are ready to fund bankable projects, we are now more cautious especially regarding execution risk," said Rajnish Kumar, managing director—compliance and risk department, State Bank of India. Unless all approvals are in place, the lender will not like to extend credit, he added.
The minister added that the perception of investors is changing and they are now coming back. “People are now bidding for new projects," he added. The perception of multinationals cannot be changed overnight, he said, adding it is evident from World Bank ease of doing business ratings and other indicators that India is making strides. “We understand that unless the economy improves, the capacity of infrastructure projects to pay back will not improve," he added.
Talking about empowering urban local bodies, Naidu said that they need to become credit-worthy. “I am going to allow urban development bodies to use the money given by me as seed capital so that they can get finance from banks," Naidu said. To that extent, these bodies are being consulted regarding clearances and accountability. He emphasized that capacity of urban bodies need to be increased and the government plans to create special purpose vehicles for all cities.
The minister said that urbanization is the focus of the government. “We allowed PPP (public-private partnership) and we are allowing FDI (foreign direct investment) in various sectors. We understand that better living conditions are only possible through better infrastructure," he said.
The government plans to set up 100 smart cities, for which it has allocated ₹ 5,000 crore, apart from seeking to provide housing for all by 2022. “The amount allocated for smart cities may not be enough, but states will contribute also. A lot of money needs to come from local and overseas markets," he added
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