Speedier clearances no magic wand for Indian economy to clear infrastructure logjam

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GDP growth in the latest quarter was the slowest since during the global financial crisis, and the Indian rupee has tumbled ever deeper against the US dollar. GDP growth in the latest quarter was the slowest since during the global financial crisis, and the Indian rupee has tumbled ever deeper against the US dollar.
SummaryStroke of a pen in New Delhi will not be enough to kickstart the moribund economy.

The percentage of total projects delayed on account of land acquisition-related issues more than trebled to 11.3 percent as of March 2013 from six years ago, the note said.

"How can you run through these projects when land must be acquired before financial closure?" said a senior official at the Planning Commission, a powerful government advisory body that helps steer infrastructure policy, on the clearances. "You can't talk things up. Look at the rupee, it's shivering."

The Federation of Indian Chambers of Commerce and Industry was scathing about the bill, which will replace colonial-era legislation, saying that not only will land cost more, the process of acquiring it will be stretched by 4-5 years.

STOPPING THE ROT

The government's Cabinet Committee on Investment (CCI), set up by Prime Minister Manmohan Singh in January, was charged with stopping the rot by solving inter-departmental disputes and speeding up clearances, especially environment and fuel permits.

Among its successes, the committee ended a 14-year saga involving NTPC Ltd, the country's largest power producer, and Coal India Ltd, the world's biggest coal miner, over the construction of a 1,980 MW power project.

NTPC was initially granted permission to build the plant in Jharkhand, but then Coal India claimed the site after coal reserves were discovered underneath it. After years of dispute and the establishment of a committee headed by a top civil servant to look into the case, the CCI ruled in favour of NTPC.

However, NTPC still had more hoops to jump through before it could finally issue equipment tenders. It had to move the construction site by about 300 metres, and because environmental clearances had expired they had to be obtained again.

Such hurdles are typical in India, where the average project needs 56 separate permissions that can take two years to obtain.

Vinayak Chatterjee, head of the Feedback Infra consultancy, said the clearances were a positive step, but resistance from ministries keen to guard their veto rights has watered down the CCI's powers.

"The CCI was originally conceived as a National Investment Board ... and that was supposed to be a far more powerful body which would

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