With the aim of accelerating investment, the Government today approved the formation of a Cabinet Committee on Investment (CCI). And the Cabinet Committee on Economic Affairs (CCEA) gave its nod for a new investment policy for urea.
On the CCI, the Government has sought to allay concerns raised by the Environment Ministry by deciding that the committee will not be an appellate authority. If a particular Ministry has turned down a proposal within the time-frame set by the investment body, the aggrieved party cannot appeal before the CCI, a senior Cabinet Minster said. The process of appeal will be the same as under the current mechanism The new CCI will be headed by the Prime Minister. He will now nominate members to this committee.
This panel hopes to expedite clearances for projects of investment size Rs 1000 crore or more in sectors such as infrastructure and manufacturing.
With the formation of new body, existing Cabinet Committee on Infrastructure will be dissolved and its powers vested with the CCEA. This new investment body will prescribe time limits for approvals and clearance and require statutory authorities to abide by a time-frame for taking decisions. Once the decision of the body is notified, it will be binding on all ministries and departments. The Secretariat will also monitor the implementation of the decision and the projects.
The Government admitted that investments in many large projects, both in the public and private sectors, have been held up because of excessive delay in getting approvals. The Government has identified six major factors. These include no fixed time limit in most cases, non-adherence to prescribed rules, multiple/sequential approvals, no predictability on time-line for Government decision-making, and lack of effective monitoring of time-lines.
Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) approved new investment policy for urea. The Government estimates nearly Rs 4,700 crore a year will be saved on subsidies if five urea plants go on stream under this policy. It intends to end the drought of capacity addition that has plagued this sector the past 13 years in the absence of an appropriate policy framework. The country faces a shortfall of 7 million tonnes, bridged through imports.
With the approval of the new policy, fertiliser companies have decided to revive their projects. The Chairman of IFFCO, U.S. Awasthi, told Business Line , “We will now work on our Kallol project. Approvals and land acquisition have been completed. We were waiting for clarity on gas availability, which we feel the new policy will clear.”