Cabinet to take a call on National Investment Board proposal today

NEW DELHI: The Union Cabinet will on Thursday take up the proposal to set up the National Investment Board ( NIB), a body mooted by the finance ministry to fast track project clearances and ensure their timely implementation. The Cabinet will also consider the new investment policy for urea.


The NIB will be housed in the Cabinet Secretariat and all government departments and ministries will be bound to monitor implementation of its decisions and the projects that it clears, a government official privy to the development said.

The draft cabinet note for creation of the NIB had proposed that it should be headed by the prime minister and housed in the Economic Affairs Department of the finance ministry or in the Prime Minister's Office.

But, following opposition from some ministries such as environment, it was decided to house the NIB in the Cabinet Secretariat. ET had on November 9 reported the change in the government plan with respect to the NIB.

The idea of NIB was mooted by Finance Minister P Chidambaram at the full Planning Commission meeting called to approve the 12th Five-Year Plan, which has warned that in the worst case scenario of tardy decision-making, India's growth could drop to an average 5% during 2012-17.



Growth slowed to 5.4% in the first half of the current fiscal, according to data released on Friday, as corporates shuttered investments because of high interest rates, economic uncertainty, adverse global environment and government indecision.

Gross fixed capital formation, a measure of investments, rose only 2.3% in the first half of the year, while economic growth slowed to a three-and-a-half -year low of 5.3%.

"Our problem is not conceptualising projects. Our problem lies in getting numerous clearances and getting the project off the ground within a reasonable time," Chidambaram had said in Parliament last week.

He had said similar arrangements were in place in countries including Japan, Indonesia, Malaysia and Thailand. The Comptroller and Auditor General had in its report on coal blocks allocation also called for the creation of a central authority to speed up decision making.

A successful launch of the NIB will help build on a series of decisions since mid-September that have helped improve sentiments. "We expect headline growth to improve as consumption will likely benefit in a pre-election year, while investments could get a leg up with the National Investment Board, " Citi economist Rohini Malkani said in a note on Friday.

The new investment policy for urea aimed at boosting urea production in the country is also expected to be taken up by the cabinet committee on economic affairs.