1. Narendra Modi govt turns to ‘Swiss challenge’ for awarding big projects; here’s why it is a good idea

Narendra Modi govt turns to ‘Swiss challenge’ for awarding big projects; here’s why it is a good idea

Swiss challenge for big projects is a good idea

New Delhi | Published: October 18, 2016 6:18 AM

Given the charges of partisan politics levelled by former J&K chief minister Omar Abdullah at the Centre’s decision to locate an IIM at Jammu—as opposed to one in the Kashmir Valley—a few days ago, it is just as well that the government has decided to adopt the Swiss challenge method to award such projects in the future. It is not just the IIM at Jammu, decisions to establish hospitals such as AIIMS or educational institutions like IITs or even refineries or LNG terminals, among a host of others, have always been controversial, with favoured states generally walking away with prestigious projects over the years—indeed, the maximum number of Railway lines are typically associated with which state the railway minister hails from. According to a report in The Indian Express, the Cabinet secretariat has put out a note saying that the Swiss challenge method is to be used for ‘selection of location’ for even film festivals, the National Games and Pravasi Bhartiya Divas, among others.

Each government department has now been asked to submit a list of projects/institutions/events under them along with an indicative list of what the evaluation parameters could possibly be. Once this is done, each state will be free to bid on these parameters. If, say, the most important parameter is availability of land, any state is free to bid by indicating the amount of unencumbered land it can provide and how soon. Once this is done, as per the terms of a Swiss challenge, any other state can better this, and the original state can then better it again … and the winning state will walk away with the project. This is not only taking competitive federalism to a new level, it will be good for projects since states will end up competing over ease of providing land, extent of fiscal concessions, connectivity, provision of utilities or speedy statutory clearances, among others. Consider the fact that, while the government had announced eight new IITs to be established back in 2008-09, only three have got full-fledged campuses—with land being allocated up-front, this cannot happen in the new scheme of things. A challenge process would prevent cases like Goa where, after receiving R98 crore in funding, the state now wants to delay the hosting of the National Games due to the impending elections. A potential problem is that such selection will ensure only the better-off states get new institutions, but this can be fixed provided only efficiency parameters are used—in any case, if a state is genuinely keen to get a project, there is no reason why it should not have to work for it by speeding up clearances, including provision of land

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