The key theme of Rahul Gandhis speech at the Ficci session on Saturday was his criticism of the slow pace and arbitrary nature of government decision making. Those are valid points and the dip in the growth rate of the GDP to less than 5 per cent shows what the combined impact of these two inflicted on the economy.
The only problem with that piece of wisdom is that five years ago on July 8, 2009 Prime Minister Manmohan Singh had also explicitly recognised this problem and set up a Delivery Monitoring Unit (DMU) in his office to address these issues. As the press release by Singhs office at that time said the key role of the DMU will be to fast-track implementation of and ensure trouble-shooting through periodic reviews of iconic projects. It was to also report to him regularly that it had indeed done so.
The five-point task of the DMU was to do the same things that the Cabinet Committee on Investment (CCI) set up in 2012 is supposed to be doing, except for giving the final clearance.
It is obvious then that Singhs government was aware of the problems it was about to face. Yet project clearances did dry up, despite the DMU. Still it took the government almost three years to travel from there to set up the CCI, with as we saw only one addition made in the terms of reference and projects have started getting cleared. So we can argue that for instance a Rs 1,000 crore project conceived in July 2009 the clearly measurable additional cost of corresponding time over run was all because the PMO did not anticipate this additional term of reference at that point. Worse, it took Singh and his team these years to rectify that one problem.
For instance, Rahul mentioned the government will set up a special purpose vehicle that will obtain clearances for harnessing investment powers for national resources before they are auctioned out. The Power Finance Corporation did exactly that with the rights for the ultra mega power projects. But in the distance between DMU and CCI, of the 16 planned so far, only one and a half has become operational.
If one were to argue that the DMU was not really meant to well deliver like the CCI, then of course we have a far serious problem on our hands. But assuming it is not so, this is