PM & FM chart out 8-week revival plan

Written by Pranab Dhal Samanta | New Delhi | Updated: Jun 19 2013, 08:10am hrs
Just days before the Cabinet reshuffle, Prime Minister Manmohan Singh along with finance minister P Chidambaram cleared an eight-week road map with over a dozen action points to give another booster dose to the economy.

The range of measures include coal pool pricing with assured 80% coal supply to close to 78,000 MW worth of power projects, regulators in the coal, railways and roads sectors, a new foreign direct investment policy with likely increase in the cap in telecom and aviation, and the creation of an infrastructure investment fund from the surplus being held by central public sector entities.

These decisions, with specific deadlines in some cases, were taken at a June 13 meeting chaired by the PM and attended by the finance minister, deputy chairman of the Planning Commission Montek Singh Ahluwalia, chief economic adviser Raghuram Rajan and principal secretary to the Prime Minister Pulok Chatterji, among others.

Among the deadlines, the one on coal pool pricing under which Coal India will provide an assured 65% coal supply and power producers will be allowed to import another 15% through CIL or on their own could be set at two weeks, with the Cabinet like to take up matter on Friday. A decision on allocation of over 14 coal blocks and on a new coal block auction policy is expected by the end of the month, while that on the coal regulator is likely in two weeks. A new gas pricing policy should be in place in two weeks, a Railway Tariff Authority by next week and a regulator for the road sector by mid-July.

Besides this, some other decisions that will be implemented over the next eight weeks include a new FDI policy that will look into further increasing caps in sectors where FDI is allowed. The cap in telecom may go up to 100%, and that in the aviation sector is also likely to be increased. The infrastructure investment fund from PSU surplus too is expected in this time frame, and could see an amount over R1 lakh crore, given that Coal India alone is sitting on R40,000 crore.

Other key decisions include constituting a group to take charge of big railway infrastructure projects, which will be a given a month to identify measures to speed up these projects. Disinvestment of Balco and Hindustan Zinc will also be examined. Issues related to preferential market access should be harmonised in a month's time, and a call will be taken on road sector equity take-out.

While much of this determination appeared diluted by the appointment of ministers like Mallikarjun Kharge and Oscar Fernandes in key infrastructure ministries, insiders insisted that there will be no negative impact because the PM has decided on taking direct control over key issues.

In particular, sources said, the PMO through the Cabinet Committee on Investment CCI will closely monitor all major rail and road projects. This will include the eastern and western freight corridors as well as the three industrial corridors for which massive foreign investment is expected.