Costly push to mega projects

DESPITE concerns from civil society groups, the Union Cabinet gave in-principle nod for setting up a Cabinet Committee for Investment (CCI) on December 13. Introduced as the National Investment Board (NIB) by the Union finance ministry earlier this year, CCI is being set up for expediting clearances for mega projects with investment of above Rs 1,000 crore. CCI will be chaired by the prime minister and comprise members from various ministries as decided by him.

Setting up of the committee is in line with the recommendation of the Comptroller and Auditor General of India (CAG), released in May this year, on augmentation of coal production. “There is a need to constitute an empowered group along the lines of Foreign Investment Promotion Board as a single-window mechanism with representatives of Central nodal ministries and state governments to grant the necessary clearances…,” the report says. The idea has been picked up by the finance ministry, which alleges green clearances are holding up the country’s infrastructure development and growth.

An analysis of clearances granted by the Union Ministry of Environment and Forests (MoEF) during the 11th Five Year Plan shows the finance ministry’s allegations do not hold water. The analysis by Delhi-based non-profit Centre for Science and Environment (CSE) shows that the ministry granted many times more environment clearances than planned for the 11th Five Year Plan in key sectors like thermal power, coal and non-coal mining, cement and iron and steel. About 200,000 hectares of forestland was diverted during the period for these sectors. “Where is the question of green clearances holding up growth? MoEF is granting way more clearances than required, disregarding environment and social issues. What is needed is institutional reform in MoEF to make ÔÇêthe clearance process stronger, transparent and accountable. Otherwise, more institutions like CCI will come up and further dilute the process,” says Chandra Bhushan, deputy director of CSE.

	An investment board will only promote investment, while MoEF has to protect the integrity of environment
	JAYANTHI NATARAJAN, UNION ENVIRONMENT MINISTER

In October, Union environment minister Jayanthi Natarajan wrote to the prime minister expressing concern over setting up of such a body. “When a minister...,” she wrote, “acting upon the expert advice of officers, takes a decision, there is absolutely no justification for an NIB (now CCI) to assume his/her authority, nor will the NIB have the competence to do so.” She also stated that no one has the right to set up a project just in the name of investment. Her concerns, as pointed out in the letter, stem from a fundamental difference between NIB and MoEF: the objective of an investment board will be to promote investment while that of MoEF is to protect the integrity of the environment and protect forests, wildlife and forest-dwellers.

During a discussion in the Lok Sabha in November, K P Dhanapalan, an MP from Kerala, also said that CCI may dilute clearance procedures. “This may aggravate environmental issues and hence needs to be carefully thought through,” he said. During the discussion, Finance Minister P Chidambaram clarified that CCI will only deal with large projects that give a fillip to the economy. “The committee will monitor these projects and will advise the ministries concerned...,” he explained.

	Cabinet Committee for Investment will only deal with large projects that give a fillip to the economy
	P CHIDAMBARAM, UNION FINANCE MINISTER

The Federation of Indian Chambers of Commerce and Industry (FICCI) has welcomed CII. “We hope the committee helps the industry get state clearances also in a faster and time-bound manner as maximum clearances are required at the state level,” FICCI president R V Kanoria said in a press release.

Meanwhile, civil society groups are opposing setting up of CCI. Greenpeace and Bengaluru-based non-profit Environment Support Group (ESG) have initiated online campaigns against it. “Setting up of CCI is undemocratic, dangerous and against the national interest,” says Leo Saldahna, coordinator at ESG. Shilpa Chohan, Supreme Court lawyer, says till the time CCI does not overrule the decision of a ministry and is just an administrative body to look into delays, it may prove to be a positive step by bringing together different departments on a single platform.

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