by shri arun shourie
DESCRIPTION
Release of the Report on ‘Reforming Investment Approval & Implementation Procedures, Part-II’ (Downstream Issues - Implementation and Operation). By Shri Arun Shourie Minister of Commerce & Industry, Disinvestment & Development of North Eastern Region 17.12.2002. - PowerPoint PPT PresentationTRANSCRIPT
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Release of the Report on
‘Reforming Investment Approval & Implementation Procedures, Part-II’
(Downstream Issues - Implementation and Operation)
By Shri Arun Shourie
Minister of Commerce & Industry, Disinvestment &
Development of North Eastern Region
17.12.2002
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‘….We may have done away with the License Quota Raj but the Inspector Raj still survives. Many entrepreneurs- especially those in the small and medium sectors- are routinely harassed and humiliated under the Inspector Raj. This must end….’
Hon’ble Prime Minister In a recent speech
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Background
In a major initiative, a Committee was set up to suggest simplification in procedures for investment approval and implementation of projects;
The Report is in two parts: Part-I: Upstream issues, i.e., from the stage of
conceptualization of projects till investment approval; presented in May 2002;
Part-II: Downstream issues, i.e. from the stage of investment decision till implementation of projects and their operational phase; presented in November 2002.
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The Process
A Sub-Group constituted for looking into downstream issues;
Extensive consultations and interactions with Ministries & Business Organizations.
The Sub-Group also referred to: Case studies and synthesis study
commissioned by PMO; Base papers by Ministries/Departments; Other studies and reports; Special Acts and State level initiatives;
(Annex-III refers)
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Major Bottlenecks Identified in Implementation and Operation of Projects
Plethora of laws regulate projects in various sectors;
Cumbersome procedures prescribed under various laws/rules/ regulations, etc.;
Lack of information on procedural requirements;
Inadequate transparency in administration of approval;
Multiplicity of agencies responsible for approval administration.
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Major Bottlenecks Identified in Implementation and Operation of Projects (contd.)
Regulatory framework and ground level hassles;
Handling of approvals at State level; Greater difficulties encountered in :
Environment and forest clearances; Land acquisition; Central Electricity Authority (CEA)
clearance.Clearances from Local authorities a greater
problem than Central and State level
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Summary of Recommendations
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Re-engineering of Regulatory Processes
Re-engineering of regulatory processes necessary to: Consolidate extant laws; simplify procedures
prescribed therein; Prescribe and adhere to time limits; Develop trigger mechanisms; Prioritise regulatory reforms; Make procedures amenable to IT mode; Suggest generic structure for re-engineering
of processes at State level.
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Guiding Principles
Each approval requirement to be examined and re-engineered in the following order: Self-regulation; automatic approval upon
filing documents. (‘blinking traffic lights’) Professional outsourcing. (‘stop-go traffic
lights’) Prior case-by-case regulation by public
agency. (‘policeman regulating traffic’)
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Other Principles
Specific public purpose to be served by each approval;
Extent of details required to be presented along with application;
Defined time-limits for each stage of processing;
Approval/renewal requirement to keep pace with the technological and economic environment.
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Re-engineering of Regulatory Processes - How
Set up Re-engineering groups in select Ministries/Departments: Labour, Environment & Forests, Power,
P&NG, Agriculture, DIPP, to begin with. Secretary of concerned Ministry/
Department to head this group; Departments/Agencies/Stakeholders,
involved in the approval process, to be associated.
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Re-engineering of Regulatory Processes – The road map
Re-engineering Group in each Ministry to complete re-engineering of processes within six months and review of extant laws within one year;
Committee of Secretaries (COS) to review progress every month;
Ministries/Departments to include position paper on progress of re-engineering in their monthly progress to CCER.
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Other Recommendations
Dispense with the need of publication of notices in official gazette;
Financial limits as also sectors requiring environmental clearance to be made co-terminus with Plan period , to be reviewed every five years.
Expeditious disciplinary proceedings and exemplary punishment in proven cases of misuse of power, leading to delays in approvals;
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Investment Facilitation
Industrial Investment Facilitation Board (IIFB) to help resolve difficulties faced during implementation;
IIFB to periodically review implementation of projects with proposed investment of Rs. 100 crores and above;
Any investor can approach IIFB irrespective of investment limits;
FIIA will continue its focus on foreign investors;
Facilitation Teams in Ministries for follow up of projects.
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Dismantling ‘Inspector Raj’
Reporting, record keeping, licensing and inspection requirements to be reviewed during re-engineering of regulatory processes;
Minimize the need for investors to approach regulatory authorities for permissions;
Mandatory reporting only for cases requiring prior case-by-case regulation by public agencies;
Allow maintenance of common registers on labour related issues by enterprises employing up to 500 persons (present limit 19);
Combine and outsource inspections; Greater use of IT in reporting/record keeping.
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Role of States
Responsible for implementation of most legislations, administration of approvals;
Empowering the ‘Single Window’ vital along with re-engineering of regulatory processes;
Some states have taken initiatives to reduce delays;
Information on ‘Best Practices’; ‘Performance of States’ to be disseminated;
Incentivise the States.
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State Level Recommendations
Committee under Secretary (Industry) to finalize schedule for joint inspections;
Outsource authority to approve building plans;
Introduce ‘Composite Application Forms’; Task Force to coordinate shifting of
utilities; Periodic interactions with investors on
problem solving and procedural simplifications.
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Action Plan for Greater Use of IT
Greater use of IT in approval administration with a time bound action plan for electronically accepting and processing applications, inter-linking departments, etc.;
Dissemination of information on procedural and documentary requirements, time frame, agencies responsible, forms in downloadable formats, etc.;
Status of pending applications to be displayed at website with reasons for delays.
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Capacity Building Needs
Capacity building initiatives needed, both at Central and State level;
States will require assistance for the actual process of re-engineering;
Training on modern management practices and use of IT.
Assistance of Multilateral Financial Institutions may be availed.
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Implementation Status
Government has in November 2002 directed, to begin with, some of the relevant Ministries/ Departments, to implement the report;
Progress of implementation to be reviewed by Cabinet Secretary in February 2003;
Action already underway in the Department of Industrial Policy & Promotion.
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Thank YouThank You