Describing the scaled-down growth target of 8.2 per cent for the 12th Plan as “realistic,” Finance Minister P. Chidambaram on Saturday pitched for the setting up of a National Investment Board (NIB) headed by the Prime Minister for according speedy approvals to mega project proposals to facilitate expeditious implementation.

Expressing concern over delayed implementation of mega projects, Mr. Chidambaram, during his intervention at the meeting of the full Planning Commission under the chairmanship of Prime Minister Manmohan Singh, asserted that clearance by the NIB should be a “final decision” and no interference by any other authority should be entertained.

“The NIB’s authority should extend to proposals/projects where the investment is above a certain threshold, say Rs. 1,000 crore. Once the final decision is taken by the NIB, no other Ministry or department or authority should be able to interfere with that decision or delay its implementation,” he said, pointing out that such an approval mechanism was essential as a “truly ‘final’ decision [on projects] does not emerge for many years” under the current dispensation.

To tide over the problem of according final approval since the business rules, at present, allocate the authority to take the final decision to one or more ministries, Mr. Chidambaram said “the authority to take the final decision/decisions should be vested in a NIB to be chaired by the Prime Minister and the Allocation of Business Rules should be amended to create such a mechanism.”

As for the outlays in the 11th Plan falling short of targets, Mr. Chidambaram noted that this was mainly owing to the failure in achieving physical targets and sought to illustrate his point on the fact that power generation capacity addition during the Plan period was 55,000 MW, way below the target of 78,700 MW, and similar gaps were witnessed in other key sectors such as coal, crude oil, gas and railways.

Physical targets

Suggesting a way to overcome these hurdles, Mr. Chidambaram said the outcomes “must be measured not only in terms of achieving the financial outlays but also achieving the physical targets. The main reason why actual growth rate in each Plan period was less than the targeted rate was the failure to achieve physical targets.”

Turning to the 12th Plan economic parameters, the Finance Minister noted that while the GDP (gross domestic product) growth target of 8.2 per cent was “realistic,” given that achievement on this front was 7.6 per cent during the 10th Plan and 7.9 per cent in the 11th Plan, he viewed that the Plan proposal to reduce subsidy from 1.9 per cent of GDP in the budget estimates of 2012-13 to 1.2 per cent in 2016-17 was “over-optimistic.”

Direct cash transfer

He pointed out that since the estimated major subsidies in 2012-13 would be around 2.4 per cent of GDP, and a sharp fall as assumed in the Plan might be over-optimistic, a system of direct cash transfer of subsidies in food, fertilizers and petroleum would help in reduction.

“I would urge that by the end of the 12th Plan, these three major subsidies be rolled out across the country through direct cash transfers to the beneficiaries. Pilot projects are already under implementation for LPG and kerosene and it is our intention to extend the direct transfer mechanism to the UTs in the first phase,” he said.

As for the Centrally-sponsored schemes, Mr. Chidambaram felt that the Centre should move out of some of them as at present, out of the 147 schemes in operation, 100 schemes had an outlay of less than Rs.300 crore each for the whole country. “Given the cost of administering the schemes and the capacity now available within the States, these deserve to be closed at the level of the Central government,” he said

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