 "Centre plans to revive Investment Commission")
In a move aimed at arresting India's falling investment rate, the Centre is looking to revive the Investment Commission of India, which in its earlier avatar was headed by Ratan Tata, then chairman of the Tata group. It also had banker Deepak Parekh and former Hindustan Lever chairman Ashok Sekhar Ganguly as members.
The earlier Commission functioned under the finance ministry from December 2004 to December 2009. In its new avatar, however, the Commission could function as an arm of the NITI Aayog, said officials in the know.
The plan to constitute the Commission is at a preliminary stage at present, so the names of the chairman and members have not yet been finalised.
Set up to make recommendations to the government on policies and procedures to facilitate investment, the earlier Commission had given more than 1,400 suggestions on boosting investment in infrastructure, manufacturing, services and the knowledge economy. It had also pointed out the projects and investment proposals that needed to be fast-tracked, mentored and promoted to turn India into an attractive investment destination.
The new Commission, officials said, could have a wider role to play in the Indian economy than giving recommendations.
Though it might not be entirely be due to the Commission's recommendations, India's investment rate had increased from 32.8 per cent of the country's gross domestic product (GDP) in 2004-05 to 38.1 per cent in 2007-08. Later, amid a global financial crisis, the rate declined to 34.3 per cent in 2008-09 and never again returned to the 2007-08 level.
In one of the recommendations, the Commission had said investment in coal mining should be enhanced through bidding of blocks, a task that was accomplished later.
The Commission had also suggested carving out specified viable mining blocks from Coal India Ltd (CIL) for captive exploitation. While states have been given such blocks, those are yet to be given to private companies.
In power, the Commission had recommended setting up of 25-30 sites for mega projects, for a total of 35,000 Mw, with an investment of over $30 billion through competitive bidding on tariffs. Of the 16 ultra mega power projects (UMPPs) that the previous central government had planned to set up, four have been awarded. Three of those are operated by Reliance Power (in Sasan, Tilaiya and Krishnapatnam) and one by Tata Power (Mundra). These projects had been awarded on a competitive tariff-based bidding and executed by a special-purpose vehicle. Each UMPP is of 4,000 Mw and entails an investment of Rs 20,000 crore.
Investment scenario in the country has deteriorated in the past few years, thanks to over-indebtedness of companies and increasing non-performing assets of banks. Gross fixed capital formation, a proxy for investments, is officially estimated to fall below 30 per cent in the current financial year, the first time since the method for calculating GDP was revised from 2011-12.
