Ministries wrangle over investment panel

With the Cabinet likely to take up the issue of setting up of the Investment Commission in tomorrow's meeting, the difference of opinion between the commerce and industry and finance ministries have come out in the open.

Commerce and Industry Minister Kamal Nath is understood to have written to Prime Minister Manmohan Singh that the proposed commission should be set up under the industry ministry and not the finance ministry, as proposed.

The minister is understood to have asked for the decision on setting up of the commission to be postponed.

After Nath had a separate meeting with the Prime Minister today, it led to speculation that the two had met on the eve of the Cabinet to discuss this issue.

However, when contacted, Nath told Business Standard: "The meeting with the Prime Minister was on the India-EU summit scheduled to be held next month. As I am leaving for Maharashtra on account of the elections and thereafter to Paris, there won't be sufficient time to brief him on the summit and finalise the programme."

Nath is unlikely to attend the Cabinet meeting as he is leaving for Maharashtra tomorrow

Senior government officials were of the view that since the commission would deal with investments it should logically come under the industry ministry.

The department of industrial policy and promotion under the industry ministry was in the process of formulating a draft Cabinet note, but the finance ministry had already circulated a draft note on the setting up of the commission.

The two ministries seemed to have separate views on the functioning of the commission. While the finance ministry has proposed that the commission will interact with companies at the board level and make policy recommendations, the industry ministry is working on making the commission a single-window interface for investors, with the Foreign Investment Promotion Board and the Foreign Investment Implementation Authority falling under its ambit.

The Prime Minister's Office had directed that the Investment Commission will be set up soon after the National Manufacturing Competitiveness Council. It had also said the terms of reference of the council would not overlap with that of the Investment Commission.

The government had already announced that the commission would be headed by an eminent person to attract investment in the country and interface with Fortune 500 companies.