The finance ministry moved a cabinet note today for constitution of a National Investment Board (NIB), within two weeks of such a body being proposed by Finance Minister P Chidambaram at the full Planning Commission meeting on September 15.
The proposal is for the Prime Minister to chair it. Said a senior finance ministry official: “NIB will decide the threshold limit from time to time. It could be Rs 1,000 crore or Rs 5,000 crore.” Officials say the proposal was expected to get a cabinet nod quickly, as the PM had himself outlined, on several occasions in the recent past, the necessity for faster clearance to infrastructure projects, to improve the dampened investor sentiment and boost growth.
It is unclear if NIB would also be the deciding body for projects with foreign investment. This job is currently with the Foreign Investment Promotion Board. At the full Planning Commission meeting, chaired by Prime Minister Manmohan Singh, Chidambaram had expressed serious concern over delay in implementation of infrastructure projects and suggested creation of an NIB. He’d then proposed that its clearance be the final decision.
“I would urge that we seriously consider the need to set up a mechanism at the cabinet level to take final decisions on major investment proposals, especially in the infrastructure sector... At present, the Allocation of Business Rules allocates the authority to take the final decision/decisions to one or more ministries. In fact, this is the reason why a truly ‘final’ decision does not emerge for many years,” he’d said.
He’d suggested the NIB as an answer and suggested its authority extend to proposals/projects where the investment was “above a certain threshold, say, Rs 1,000 crore. Once the final decision is taken by (it), no other ministry or department or authority should be able to interfere with that decision or delay its implementation,” Chidambaram had stressed at the meet.