India sets up mechanism to help investors do business
NEW DELHI: Spearheading second-generation reforms to ensure investment proposals get translated on the ground is the second part of a report on "Reforming Investment Approval and Implementation Procedures" released here Tuesday by Commerce Minister Arun Shourie.
Dealing with downstream issues from the stage of investment approval to the implementation of projects and their operational phase, the commerce ministry on the basis of the report has decided to set up an Industrial Investment Facilitation Board (IIFB) to help resolve difficulties faced during by investors.
Taking into account some of the result-oriented practices being adopted in investor friendly states that are offering single-window clearance and the results of surveys conducted by various leading industry bodies, the government has decided to help investors get speedy clearance.
As Shourie admitted, while investment proposals other than through the automatic route take hardly between four to six weeks to get cleared, the process sometimes takes five or more years. The result is several investors, specially in the power sector, have been known to have abandoned projects rather than put up with the hassles.
"We have seen that investment approval does not automatically get translated into investment flow as there are a plethora of clearances to be got ranging from land acquisition, environment and forest clearance and Central Electricity Authority approval in the case of power projects," said Shourie.
Stating that proposals in the report, already under implementation, would be reviewed in February and the result put on the website of the ministry, Shourie said this would "serve to put pressure on the authorities (including various federal ministries) to give speedy clearance to ensure project implementation."
For a result-oriented approach, Shourie said the progress of the board efforts should be reviewed every three months to see how well the states and the federal government are assisting in the implementation process.
"We hope to complete the re-engineering of the processes within six months and will review if additional powers need to be conferred on the board to ensure more effective implementation," said V. Govindarajan, convenor of the expert committee.
Among far reaching reforms, the report recommends outsourcing of inspection of industrial units and drastically reducing the number of inspections and formalities the industrial units have to currently comply with, said Shourie.
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