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Business News/ Industry / Infrastructure/  Environment ministry to oppose national investment board

New Delhi: The environment ministry will strongly oppose any government proposal to dilute its clearance procedures, a move that may put in jeopardy the government’s plan to create a National Investment Board (NIB) to expedite approvals for large projects.

“We will oppose any move to bypass forest and environment clearances. Everything has a procedure and that procedure should be followed," a top environment ministry official said, when discussing the plans of the government to set up the NIB. The official requested anonymity.

Finance minister P. Chidambaram in September had suggested the setting up of the NIB under Prime Minister Manmohan Singh to speed up clearances for big infrastructure projects.

Chidambaram had said projects above a certain investment threshold will only be taken up by the NIB. “Once the final decision is taken by the NIB, no other ministry or department or authority should be able to interfere with that decision or delay its implementation," he had said.

But the proposal has found little support in the environment ministry.

The official cited above said every ministry has its mandate to function.

A centralized environmental clearance under the NIB will not mean that environmental issues are compromised, according to Abhay Agarwal, a partner at Ernst and Young, a consultancy. “It only means that there has to be a time-frame, accountability and responsibility. The issue with investors has been that there was no end to cycles of questions and answers. I think some accountability, responsibility, some centralized monitoring is important," he said. “I see really no reason for opposing it."

Agarwal said industry needs accountability towards all the approvals and decision-making. “It has to be time-bound and precise and definite and what is good for environment and what is not, what will go for environmental clearance and what will not go—these are not infinite questions. They have finite answers," he said.

Delay in approvals from the environment and labour ministries have also impeded the notification of the national manufacturing policy, cleared by the cabinet almost 11 months ago to create 100 million jobs by 2022.

The policy provides for certain relaxations with regard to environment and labour norms with in-built safeguards, which have been the bone of contention.

An official of the department of industrial policy and promotion (DIPP) had earlier said the department has been in advanced discussions with the labour and environment ministries and guidelines will be notified as soon as the concerned ministries approve it.

“There has been a broad consensus on third-party inspection, combined consent and authorization by the designated officer or the regional office for the national investment and manufacturing zones (NIMZs)," the official had said, requesting anonymity.

However, the environment ministry official cited above said his ministry has opposed the NIMZ’s overriding powers. “You can’t bypass the (forest and environment) clearances."

The DIPP had in March 2010 proposed to establish NIMZs to encourage manufacturing to increase the share of manufacturing in gross domestic product (GDP) to 25% over 10 years from around 16% now.

The policy proposes to significantly liberalize the labour and environmental laws for faster clearance for industries.

However, the proposals were opposed by the labour and environment ministries because of which a decision by the cabinet had to be deferred. Later, a group of ministers under agriculture minister Sharad Pawar was able to find a consensus on the contentious issues, after which the cabinet cleared the proposal in October last year.

NIMZs will house one or more special economic zones, industrial parks, warehousing zones and export-oriented units, along with domestic tariff area units. The proposed NIMZs are expected to attract investments of around 25,000 crore and would provide employment to 260,000 people in Nagpur district of Maharashtra, Sharma said.

Ashwani Kumar, junior minister for planning, recently said in an interview that it is necessary to expedite critical decisions and remove bottlenecks.

He said that there was also a need to address inter-ministerial issues. “We need processes for quick decision-making, while ensuring transparency and absence of arbitrariness," he said, adding that all the conflicting viewpoints of all members and line ministries will go before this board and decisions will be taken there and then, with no review thereafter.

Agarwal said India needs responsible investment. “NIB is a very good idea as it will bring a lot of accountability and also focus. Under the Prime Minister, if projects are reviewed, everybody is likely to act in tandem towards a common goal, which is the main problem currently. There is a lack of harmony, coordination and synergy," he said.

“And this kind of mechanism is there in most countries and is long overdue."

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Updated: 10 Oct 2012, 07:24 PM IST
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