Removing delays

The decision to empower Central ministries and departments to clear investment proposals costing up to Rs 1,000 crore without they going through the cabinet route for approval, is a step in the right direction. This has been done by amending the Transaction of Business Rules for the Cabinet Committee on Economic Affairs (CCEA). This change goes a long way in cutting the bottlenecks that dog the clearance of most projects leading to unending delays. Hitherto, the ministries could clear projects worth up to Rs 300 crore, beyond which they had to be approved by the CCEA. The move will be obviously welcomed by the industry as it has the aim of ensuring speedier clearance of projects. Importantly, it will help do away with centralisation of powers within the government. The NDA government’s decision comes shortly after another move to decentralise clearances of environment projects by allowing the regional empowered committees in different parts of the country competent to grant approvals for projects requiring up to 40 acres of forest land.

The fast track project clearance is expected to help infrastructure ministries, especially the road transport and highways ministry and those implementing social sector schemes.  The road transport ministry - which has been blamed for tardy construction of national highways - had recently complained of delays because of multitude of required clearances. With this move, the ministry may look to award contracts for 8,500 km of roads this fiscal itself besides completing construction of 6,300 km.

While the last week’s cabinet decision is a welcome one, this does not mean that all hurdles towards clearing a project, even if it is within Rs 1000 crore size, are done away with. While a project gets cleared from that ministry, it has to obtain clearances from other ministries as well. This is where delays can still happen, especially in cases such as land acquisition for infrastructure, mining or other projects. As a next step, the Narendra Modi government would do well to look into this aspect also. Approvals should mean clearance from all agencies - public and private - and not just from the nodal ministry. Along with this, greater transparency is needed which would go a long way in helping make the project a clean one devoid of all blemishes such as corrupt deals. As for large projects involving the states and having inter-ministerial issues, they have to be still referred to and approved by the CCEA or the cabinet.

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