National Investment Board

The proposal of National Investment Board (NIB) is included in the 12^th Five Year Plan against the backdrop of sluggish growth that Indian economy has encountered in past few years. The NIB is proposed by ministry of finance to speed up the investment decisions in the government. NIB will act as a final body for clearing big investment proposals after which no ministry will have power to raise objections. It is proposed that NIB would be headed by the Prime Minister and have ministers from key ministries such as finance, and law and justice as its members.

The stated purpose of the NIB will be to take over the process of granting licenses, permissions and approvals whenever the competent authorities fail to act in time. This is intended to prevent adhocism emerging from autonomous functioning of ministries and to fix responsibility for inordinate delays in obtaining all the approvals / clearances required for implementation of the project.

The proposed functions of NIB

The following are the proposed functions of NIB: 

1. The Board would prescribe timelines for the different types of approvals from different line ministries
2. NIB would enforce the time lines for the decision making. If the line ministry or the department fails to take any decision within the prescribed time limit, then the issue would be escalated to NIB
3. NIB would identify the key projects that needs to be implemented  in the time frame
4.  NIB would facilitate mechanism for clearance of such projects that have been delayed
5. The NIB would have overriding powers and the decision of NIB would be binding on all the ministries
6. In the case of delays due to inter-ministry disputes, the decision of NIB would be final.

Need for NIB

The clearance for the big infrastructure projects in India is marred by red tapeism with multiple departments and agencies as stake holders in decision making. NIB is noteworthy against the milieu of the twisted web of permissions required for a project. For example, over 65 clearances/permissions are required for a thermal power project at three different levels - federal, state and local. There are 17 ministries at the central level that directly or indirectly look after infrastructure projects. They are road transport, railways, drinking water and sanitation, power, urban development, atomic energy, renewable energy, shipping, civil aviation, communication and IT, housing, water resources, rural development, environment, industry and commerce, heavy industry, coal and mines. With three more central institutions involved with clearances - Planning Commission, the finance ministry and the Prime Minister's Office (PMO) - we get 20 clearance gateways in New Delhi.

Arguments against NIB

Various ministers in the UPA II government in general and ministry of environment in particular have raised objections against the proposed structure of NIB and its overriding powers. The presence of Prime Minister in the NIB along with the key minister would make it no less than a Super Cabinet with overriding powers which would be capable enough to put pressure on ministries, department and agencies. There is also a chance that NIB could encroach upon or influence the decision making of state governments and local bodies, thus going against the principle of federalism.

Delhi based NGO Centre for Science and Environment (CSE) has categorically criticized the proposed structure of NIB by quoting the official data of government. According to CSE, NIB would destroy the existing environmental regulatory regime, which instead needed more reforms. CSE noted that project rejection rates for forest clearances were a mere 6% and that of environment clearance an almost negligible 0.1%.

The data released by CSE showed that 8,734 projects had been granted forest clearance and 1.98 lakh hectares of forest land diverted for development in the 11th Plan. The pace of forest land diversion had doubled during period. These clearances included 119 coal mining projects accorded forest clearance, diverting 31,500 hectares of forest land —the highest number cleared in any five year Plan since 1981.

Conclusion

The Development V/s Environment debate is the core issue involved with the proposed structure of NIB. It’s a  fact that red tapeism, bureaucratic apathy and corruption delays the infrastructure projects in India which are crucial for the higher growth trajectory. Nonetheless, a fast track mechanism of single window clearance for important infrastructure projects as envisaged by proposed NIB is vital step but it should not happen at the cost of environment.

Fast track clearance of big infrastructure projects would facilitate lop sided growth and would be ecologically unsustainable if the rights of local communities and the environmental regulations are ignored. Thus NIB should confine itself to mitigate red tapeism, arbitrary delays in decision making and enforcing timeline for the implementation.