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Wednesday, Dec 18, 2002

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Reforms in investment approvals proposed

By Our Special Correspondent

NEW DELHI DEC. 17. The Govindarajan Committee, set up to reform investment approvals and implementation procedures, has made wide-ranging recommendations for re-engineering the project cycle for public investment for physical and social sector development. This is expected to ensure greater professionalisation of the identification, preparation, approval and post-evaluation stages of the cycle.

It has also detailed a process for re-engineering all relevant regulatory systems at the Central, State and local government levels to ensure transparency, unambiguous decision rules, minimising documentation and ensuring accountability. The process would require that the best global practices are taken on board and the revised processes are embodied in e-governance systems.

The report released today by the Union Commerce and Industry Minister, Arun Shourie, is the second part which has focussed on downstream issues from investment approval to implementation of project and its operation. The first part of the report submitted in May this year covered the stage of project conceptualisation to investment approval.

The committee has observed that empowering of the single window system at the State level along with re-engineering of regulatory processes would have maximum impact on reducing delays in getting approvals and implementing projects. It has suggested that States can consider various alterantives such as enacting legislation or amending the rules of business to empower specially constituted bodies to operationalise and empower the single window system.

In the case of environmental clearances, which cause maximum delays to projects, the report suggests empowered committees with representation of all concerned including States should be set up for expediting decisions. Expert agencies should be authorised for initial scrutiny of applications. Diversion of forestland for pre-construction activities should be permitted after the non-forest land identified compensatory afforestation has been transferred to the forest department, the report proposes.

The committee has stressed the need for re-engineering of regulatory procedures prescribed under various legislation and regulations to simplify procedures for grant of approvals and reduce delays as well as simplify regulation of projects during their operational phase. It has suggested that re-engineering groups be set up in Ministries for detailed examination of each approval requirement under various acts, rules and regulations and re-engineering of the regulatory process. As many approvals as possible, it is suggested, should be placed on self-regulation, that is, under automatic approval upon filing of necessary documents.

The report has identified the ministries of labour, environment and forests, power, agriculture, petroleum and industrial policy and promotion as the ones in which re-engineering groups need to be set up.

On delays in approval for primary resources such as land and power, the committee has recommended that a comprehensive legislation should be enacted to dispense with the requirement of publishing notices in the official gazette. The process of land acquisition, for instance, takes an inordinately long time due to delay in publication in the official gazette.

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