Finance minister P.C. Chidambaram has hit the nail on the head with his prescription for a National Investment Board (NIB) under the Prime Minister for faster implementation of infrastructure projects that have been held up for what he has characterised as a “want of truly final decisions”.
It is an obvious result of valuable lessons from the past. The 11th Plan targets, for instance, were not achieved despite a panel on infrastructure headed by the PM and serviced by the Planning Commission. No one was held accountable as no ministry was in charge of the final decision. For instance, 500 projects are said to have been held up for want of environmental decisions. It is amazing how things were left suspended while invaluable funds borrowed for projects lay idle and interest was paid on the loans. This is why a “truly final decision” did not emerge for many years as each ministry worked in majestic isolation and just passed the buck to the other.
The NIB, as envisaged by Mr Chidambaram, will take this “final decision”, and after this no other ministry, or department, or authority, should be able to interfere with that decision or delay its implementation. This is a great idea and one looks forward to the details of how the NIB will work under the PM. After all, the PM and the Planning Commission were overseeing the lagging targets of the 11th Plan, as the finance minister himself said.
Will this NIB take decisions on issues like land, environment, etc that have been holding up projects? Will the NIB be given a timeline for implementation and subjected to accountability for achieving its target? Who will be the members of the NIB? The success of this NIB will be predicated on the right answers.
Of course, this is primarily about getting projects off the ground and creating a climate of confidence that would attract foreign investment. The fiscal and current account deficits, as the Prime Minister said, are the two important things that have to be brought down to attract foreign investment. For this the government will have to plug loopholes and end the humungous corruption that leads to leakages in subsidies. If these can be curbed, it would lead to a significant drop in subsidies while seeing that the targeted families get their entitlements. This is where the utmost political will is needed and that will has yet to be seen.