Investment panel to hardsell India abroad

NEW DELHI: Don’t be surprised if you get regular sales calls from the government urging you to invest in India. Instead of the ‘regulatory’ role played by the Foreign Investment Promotion Board (FIPB) which was ‘clearing’ overseas investment into India, the government has decided to go pro-active with the new Investment Commission.

As compared to the occasional pitch made by ministers to investors, both overseas and within the country, the Commission would go out and market India on a sustained basis.

Having cleared the inter-ministerial hankering over control of the proposed Commission, Prime Minister Manmohan Singh has set out corporate-type ground rules: Go for certain level of investment every year and make a stronger pitch in the case of sectors where adequate investments have not flowed in so far.

On its part, the government will give the Commission autonomy and support for effective functioning. The rules of the game have been laid out clearly in the Commission’s terms of reference, finalised by the Cabinet Committee on Economic Affairs (CCEA) on Wednesday.

The Commission’s mandate is to promote investment, both domestic and foreign. The new body will be housed in the ministry of finance and its performance reviewed every year, said finance minister P Chidambaram. Initially, the Commission will have a tenure of three years and will recommend to the government policy measures and procedural changes required to facilitate FDI inflows.

In clearing the establishment of the Commission at the CCEA meet, the prime minister also resolved a dispute among ministries. The commerce & industry ministry had felt that the Investment Commission should come under its ambit since the FIPB was once part of the department of industrial policy & promotion.

The ministry of overseas Indians’ affairs felt that the Commission’s goals had synergy with the work related to the Indian Diaspora since NRI investment formed a key chunk of overall foreign investment. While the tussle had delayed clearance for the proposal announced in the Budget for ’04-05, Mr Singh’s verdict was that the Commission should be part of the Department of Economic Affairs in the finance ministry.

The Commission will have a chairperson, two members and three professional groups to encourage collective decision-making. A key task of the Commission will be to ensure that proposals materialise into actual investment.

In a related development, the CCEA also approved closure of the Indian Investment Centre which was looking after FDI promotion. A VRS will be offered to employees of IIC at a cost of Rs 7 crore. The FIPB will also be wound up once the Investment Commission becomes operational.

The CCEA also revised the estimate for upgradation of the Surat-Manor section of National Highway 8 to Rs 1,131 crore as compared to the initial estimate of Rs 867 crore. The upward revision in cost is partially due to inclusion of four flyovers and 10 underpasses, apart from trauma care units and fencing for safety of users.

Sources said the CCEA deferred discussion on revision of petro product prices as petroleum minister Mani Shankar Aiyar was not in Delhi. Oil companies are pressing for a hike in prices of petrol and diesel while the Left parties are opposed to the move.

Sources said the CCEA cleared a revision of norms guiding provision of liquidated damages and consequential damages related to implementation of projects. The revised norms allow for damages at the rate of 0.5% of contract price per week of delay, subject to 10% of the contract price. An incentive at the same rate would be applicable if a project is completed ahead of schedule.