Faster nod to power projects on the cards

In an attempt to push for higher investments in the power sector, the government is working out a roadmap for reducing the approval time for projects.

The power ministry's proposal to do away with a multi-stage approval process for investments was endorsed by Prime Minister Manmohan Singh at a meeting called to discuss the power ministry's initiatives, senior government officials told Business Standard.

There was consensus that the pre-public investments bureau (PIB) approval should, in prinicple, be abolished. Streamlining of the procedure for investment approval is likely to reduce the time taken for project approval from over a year to about 20 weeks, officials said.

On Tuesday, Singh had said that the power sector in India would need additional foreign investment of $ 75 billion over the next 10 years.

This was part of the total package of $ 150 billion worth of foreign investment in infrastrucutre that the country was targeting over the next 10 years. He also asked the power ministry to work on its rural electricfication plan in consultation with the finance ministry and the Planning Commission.

The power ministry had proposed to provide a 90 per cent capital subsidy for the programme on rural electrification. The ministries have been asked to come back to the Prime Minister's Office in a week.

The Rs 17,000 crore programme, which aims to electrify all rural households over a period of five years, has been held up for a while. It aims to set up transmitters in each of the 400 blocks of the country and provide a rural infrastructure back bone which would ensure electricity access to all rural households over the next five years. Phase-I of the project envisages an investment of a little over Rs 6,000 crore.

The current scheme provides for a capital subsidy of 40 per cent and the proposal to hike the subsidy level to 90 per cent has been opposed.

The power ministry has been proposing that states must be made to agree to a system of franchisees for collecting of user charges by roping in NGOs and panchayats.