Companies facing rejection of project application or delay from various ministries/departments may find solace in the proposed National Investment Board (NIB), which the Union Cabinet is expected to consider shortly.
“The proposed NIB may also be delegated power to consider and review requests from various organisations whose applications have been rejected or delayed by different ministries or departments,” a senior Government official told Business Line . Such an arrangement intends to reduce litigation, he added.
The proposal, as floated by the Finance Ministry, envisages an Empowered Standing Committee of the Cabinet under the Chairmanship of the Prime Minister. The proposed board, once approved, aims to facilitate and ensure time bound grant of various licences, permissions and approval as a mechanism. This will be triggered in case of the failure of the concerned ministries/department to act in time to take decisions.
The official also said that with the constitution of NIB, the Cabinet Committee on Infrastructure will cease to exist. All the powers of this committee would be transferred to the Cabinet Committee on Economic Affairs (CCEA), except for those projects notified under proposed NIB.
The Cabinet Committee on Infrastructure, under the Chairmanship of the Prime Minister, is an empowered Cabinet Committee. It considers and takes decisions on all infrastructure related proposals over Rs 300 crore. It is also authorised to decide on measures, be it fiscal, financial, institutional or legal, for promoting investment in infrastructure sector.
The idea about an NIB type body was first floated by the Planning Commission in its draft 12{+t}{+h} Plan. But there it talked about National Investment Approval Board under the Chairmanship of the Prime Minister. However, the Finance Minister, during his intervention in the discussion on the draft 12{+t}{+h} Plan, suggested formation of a National Investment Board.
The official clarified that since the word ‘approval’ denotes control, this could have conveyed a negative signal. That is why the idea to name the facilitation mechanism was changed to formation of NIB.
However, the objective was retained and that was to ‘amend the amend the transaction of Business Rules,’ so that projects above a certain size, say Rs 1,000 crore, can be cleared by the board, he said.
The Government feels that one of the major reasons for delay in approvals is that there is no prescribed time limit, in most of the cases, for the concerned ministry or department for taking decisions.