If the very nature of NIB’s work runs foul of existing laws, the whole scheme would end up being counter-productive
When the National Investment Board was first hinted at by finance minister P. Chidambaram, and then more officially referred to by Prime Minister Manmohan Singh, the proposed innovation appeared to draw wide support, particularly among investors, and others worried that the Indian economy was falling behind due to serious self-inflicted domestic constraints, not just the current woes manifested in the United States and Europe.
The UPA-led government had faced serious criticism flowing from a perceived policy paralysis until some weeks ago when it announced a slew of measures in the hope of a return of investor confidence.
It can be said to have succeeded in this. The sentiment is beginning to turn positive, though results may be visible only after a time lag. The idea of an NIB, to work directly under the Prime Minister’s supervision, seems to have been meant to convey the sense of a hands-on approach at the highest level, to further reinforce the notion that the government was serious about turning things around. Under the plan, entities that proposed to make investments of Rs 1,000 crore or above in a given project could shortcircuit the system and go to the NIB if they were rejected in the normal course of acquiring clearances. The NIB was thus to have become the last court of appeal and single-window clearance mechanism rolled into one. Its members were to be the finance minister and the law minister.
But since then the proposal appears to have run into some rough weather, with a long letter of protest from minister of state for environment and forests Jayanthi Natarajan to the PM, plainly suggesting that the NIB would be in constitutional violation if it tried to take up proposals stymied for not answering to the environment laws of the land. There also appears to be a hint of turf battle here, although that may be a secondary aspect. The letter indicates too little time was given to her to respond to the NIB proposal. To make things worse, tribal affairs and panchayati raj minister V. Kishore Chandra Deo has said on record that he was not even consulted, although forest lands inhabited by tribal people — whose welfare the nation’s forest laws are meant to subserve — is his ministry’s remit.
The two ministers have made some serious points. If the very nature of NIB’s work runs foul of existing laws, the whole scheme would end up being counter-productive. The government’s single-window clearance mechanism should take on board these objections, especially as Ms Natarajan points out that coal and power projects worth thousands of crores have not even begun despite environment clearances. It’s time to locate the problem before the NIB can fix it.