After big-ticket reforms to set the investment cycle rolling and put the economy back on track, the UPA government has now shifted its focus to infrastructure. The Union finance ministry has finalised a cabinet note for creation of the National Investment Board (NIB) to expedite infrastructure projects.
Big projects across sectors will come under the direct monitoring of the board after it is set up. The cabinet note said, “To begin with, the projects where investment is Rs 1,000 crore or upwards in sectors such as roads, mining, power, petroleum, natural gas, ports and railways shall be monitored by the board.”
According to the note, the board will be headed by the prime minister and empowered to set time-frames to be followed by the respective ministries for achievement of milestones in various projects. If the ministries fail to achieve the time-bound targets such as grant of licences, permissions, and approvals, such projects will be taken over by the board.
The finance ministry, in its note, has also empowered the body to deal with representations from the aggrieved parties. “The NIB may also consider and review representations from aggrieved applicant organisations whose applications have been delayed or rejected by the ministry concerned. By doing this, the government would be able to reduce litigation,” said the cabinet note.
Bidding for public-private partnership (PPP) projects in power, transport and highways, and coal blocks have seen widespread litigations in the last couple of years. For instance, almost Rs 9,000 crore payment to highway work contractors is pending owing to arbitration with the National Highways Authority of India over the last 10 years. Also, in most cases, the interest is now more than the principal.
The NIB will be supported by a dedicated secretariat that will be supervised by the finance ministry or the prime minister’s office. “The secretariat will identify the key projects that deserve to be monitored on a continual basis,” the note said. A finance ministry official said the administrative control of the NIB will rest with the PMO as the cabinet ministers are all equal.