Photo: Priyanka Parashar/Mint
Photo: Priyanka Parashar/Mint

Montek says investment revival has many hurdles

Apart from regulatory clearances, finance is also an hurdle to investment, particularly in infrastructure, he said

New Delhi: Planning Commission deputy chairman Montek Singh Ahluwalia said on Friday that regulatory clearances were only one constraint in reviving investment.

Finance is the second hurdle to investment, particularly in infrastructure, because many investors and financial institutions are struggling with impaired balance sheets, Ahluwalia said at an event to publicize a website that will put the environment and forest clearance process online. The website will become operational by July.

The Economic Times on Wednesday reported that the government’s project monitoring group had initiated such an exercise with the environment and forest ministry.

The group was set up in June 2013 to monitor clearances for projects larger than 1,000 crore and report to the cabinet committee on investment that has the power to set deadlines for clearances and ask ministries for explanations when there are delays.

Anil Swarup, additional secretary and chairman of the project monitoring group. said similar online process monitoring for other ministries, such as mining, that give regulatory clearances could feed into a single window clearance system in the future.

Swarup also said other constraints, including finance, were the reason why all of the 147 projects pushed through by the group had not yet seen investment on the ground.

While Swarup said the group does not look into the merits of project clearances and only monitors delays, Ahluwalia said the entire regulatory clearance process needs restructuring to take into account all the costs and benefits of projects.

Ahluwalia said other experts must have representation in the future—for instance, “the forest advisory committee only has foresters."

He also said a future government could look into the varying compensatory afforestation norms for states that have high forest cover, such as those in the North-East.

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