That the original National Investment Board (NIB) proposal of finance minister P Chidambaram has been massively watered down is without doubt. In the original proposal, the rules of business were to be changed so as to transfer operational powers to the NIB, so if the line ministry (for most, this is the environment and forest ministry) refused to clear a project within a specified period, the NIB could step in and take this decision. Though it wasn?t explicitly spelled out, the understanding was that projects which hadn?t got environment clearance could also make a pitch before the NIB. Of all the plans announced by the government once Chidambaram was brought back as the finance minister, this was the one that excited the most. FDI in retail was a close second, but this was the one that promised to get back on track nearly R7,00,000 crore of stalled projects.
After environment minister Jayanthi Natarajan and rural development minister Jairam Ramesh protested vociferously, however, the rechristened NIB?it?s now called the Cabinet Committee on Investments (CCI)?doesn?t have these overriding powers. It will be involved in coordination between various line ministries whose powers will remain undisturbed, in fixing deadlines for clearances, and so on. More details of the exact working structure are yet to be notified, but the fact that Natarajan said all her ministry?s concerns had been addressed does tell its own story. The latest letter from steel minister Beni Prasad Verma to Natarajan on the huge delays in clearances to public sector SAIL is the most recent instance of delays at the ministry?s end. Critics have also pointed out that the CCI is very similar, in composition and structure, to the older Cabinet Committee on Infrastructure where, despite it being around for so many years, large infrastructure projects continued to get bogged down in delays.
That said, a lot depends on the attitude of the principal actors. Till Chidambaram became finance minister, for example, the finance ministry was seen as leading the anti-reform brigade with its retrospective taxation and lack of progress on the GST. Within the last few months, the same policy-paralysed government, similarly, has cleared FDI in single- and multi-brand retail, has made large cuts in the base price for the 2G auctions, announced a 42% discount in Hindustan Copper prices before the divestment and made big moves on Aadhar-linked payments, albeit for the politically easier ones. The CCI, in other words, has had a poor start, but the government may just be able to make it work.
