Ministries to be minimised through mega mergers

May 21 2014, 05:40 IST
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Combining the ministries would also result in a situation where policymaking is common across sectors Combining the ministries would also result in a situation where policymaking is common across sectors
SummaryCombining the ministries would also result in a situation where policymaking is common across sectors

In keeping with his leadership style in Gujarat, Narendra Modi is likely to reorganise some major economic ministries in order to ensure greater synergy. While there is some ambivalence over the contours of an infrastructure ministry — chances are this will not take place immediately — a larger energy ministry is almost certain.

The merger of the coal, power and petroleum ministries will allow well-coordinated policymaking and quick implementation of projects, BJP sources said. This will, for instance, ensure that these ministries are not at cross purposes as they are today.

The coal ministry today, for instance, has not pushed Coal India enough to supply to new power plants, something that would probably not happen under a combined energy ministry. Similarly, the quarrel between the power and petroleum ministries over gas pricing, or allocation of gas, would also be something of the past were they to be a unified entity.

Combining the ministries would also result in a situation where policymaking is common across sectors. While private mining is allowed in the case of oil and gas and private firms both produce as well as distribute power, private firms are not allowed in the coal mining sector.

In the case of an infrastructure ministry, similarly, a common ministry would apply a common approach to regulation as well as to regulators. While ports and civil aviation have regulators, roads do not.

Merging the three main infrastructure ministries — road transport and highways, shipping (which includes ports) and civil aviation — into one could be a good idea, sources said, but added that combining the railways ministry into the proposed infrastructure ministry would be easier said than done given the national transporter's financial structure and political relevance.

India needs hundreds of billions to be invested in its energy sector — in mining and beneficiation and transportation of coal, exploration and production of oil and gas both in India and abroad, in unconventional areas like shale gas and gas hydrates and also in renewable energy areas like solar and wind power. As far as the main infrastructure sectors like roads, sea ports, airports, telecom, etc, are concerned, the official estimate is of $1 trillion investments in the 2012-17 period itself, and the funds needed in subsequent years could be many multiples of that given the BJP's promise of creating world-class infrastructure for the economy to flourish.

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