New panel to fast-track infrastructure projects

NEW DELHI Thu Dec 13, 2012 10:04pm IST

1 of 2. Labourers are silhouetted against the setting sun as they work at the construction site of a residential building in Hyderabad October 5, 2012.

Credit: Reuters/Krishnendu Halder/Files

Related Topics

NEW DELHI (Reuters) - The cabinet approved the creation of a special panel on Thursday with watered-down powers to speed up the notoriously slow implementation of big-ticket infrastructure projects.

The panel, to be chaired by Prime Minister Manmohan Singh, will fast-track projects worth 10 billion rupees or more, said one minister who attended the cabinet meeting and who declined to be named.

The government hopes the new body will help to increase investment in an economy that is likely to slow in fiscal 2012/13 to its worst pace in a decade. Singh's chief economic adviser sees full-year growth of 5.5 percent to 6 percent.

Infrastructure companies have pressed for the creation of such a board to speed up hundreds of delayed projects. Regulatory hurdles, such as delayed land acquisition and environmental clearances, have held up projects worth over 2 trillion rupees in the road, power, coal and mining sectors alone, according to government data.

However, due to opposition from within the government, the powers of the panel have been diluted and it will not be able to directly clear the projects.

It will be up to individual ministries to approve projects, but where there are delays, the new panel will have the authority to intervene. It will not, however, be able to overturn any decisions made by the Environment Ministry.

Environment Minister Jayanthi Natarajan had stalled the creation of the panel for months, calling it authoritarian.

The watering down of the panel's powers, which will likely disappoint investors, underscore the government's struggle to push a reform agenda aimed at reviving growth.

Red tape can delay projects for years or, in the worst cases, scupper them altogether. Bureaucracy and fights between industry and farmers over land have prevented India from plugging huge power shortages and upgrading its decrepit transport network.

A typical infrastructure project requires clearances from 19 federal ministries and, on average, 56 authorisations on issues ranging from the environment to defence. The whole process takes up to 24 months.

(Additional reporting by Manoj Kumar; editing by Stephen Nisbet)

FILED UNDER:

Reuters Showcase

Land Ordinance

Land Ordinance

Modi says willing to make changes in land decree  Full Article 

Sahara Salaries

Sahara Salaries

Some staff say Sahara has not paid salaries for months   Full Article 

DLF Fined

DLF Fined

DLF says reviewing $8.4 million SEBI penalty  Full Article 

Gold Demand

Gold Demand

India gold demand muted, eyes cut in import duty  Full Article 

Rail Budget

Rail Budget

Breakingviews - India goes back to future with $137 bln rail push  Full Article | Full Coverage 

Clean Energy

Clean Energy

India says clean energy a $160 billion opportunity over five years  Full Article 

Fall From Grace

Fall From Grace

How Sands fell from grace at Standard Chartered   Full Article | Related Story 

Buffett Annual Letter

Buffett Annual Letter

Buffett, a cheerleader for America, takes his checkbook abroad  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage