Advocates setting up of standing expert committees on regulatory affairs
A government panel, set up to suggest ways to improve the ease of doing business, has recommended that ministries — including coal, mines, steel, power, petro-chemicals and environment — work out a 20-year “perspective geographical plan”, indicating preferred locations for future projects, so that environmental clearances are granted at the earliest without upsetting ecological balance.
Such a plan of the steel ministry, for instance, should indicate preferred sites for projects with an envisaged production of, say, 400 million tonne of steel per year, based on their potential to harm environment.
The 11-member panel, set up by the Department of Industrial Policy and Promotion (DIPP) and chaired by former DIPP secretary Ajay Shankar, has also suggested the setting up of standing expert committees on regulatory affairs at the central as well as state levels to undertake independent regulatory impact assessment and engage with sectoral regulators. The idea is to reduce the regulatory burden of businesses and ensure actual costs of regulation don’t outweigh the intended benefits. However, the role of such a committee would be restricted to only making recommendations, and it won’t act as a super regulator.
On the “perspective geographical plan”, the panel has suggested the list of all such sites be firmed up through a transparent consultative process, and a detailed mapping of flora, fauna etc with the use of satellite imagery be undertaken, along with public hearings.
The project developer may be spared the burden of putting together land for compensatory afforestation and should be only required to pay the net present value (NPV) of the forest land being diverted for non-forest use, it says.
The cost of the land must be used for compensatory afforestation. This will considerably reduce the time required for forest clearances and compensatory afforestation will also be done speedily.
The government data base on the forest cover can be used to take decisions on the diversion of forest land for a project as well as for determining the NPV of the forest cover and the cost of compensatory afforestation, it says.
It recommends that such a geographical planning exercise be also undertaken to identify locations for power, steel and ship-building plants in the coastal areas as well as other manufacturing zones within the framework of coastal regulation zones.
The attempts to expedite environmental clearances comes as inordinate delays have been holding up many projects, discouraging investors and hurting industrial production. Even Prime Minister Narendra Modi, while campaigning for the 2014 Lok Sabha elections, had attacked then environment minister Jayanthi Natrajan, saying the ‘Jayanti tax’ at the ministry had derailed crucial projects. After coming to power, the NDA has put most of the applications for seeking environmental clearances online.
In an interview to FE earlier this month, commerce and industry minister Nirmala Sitharaman had said the Centre was also working with states on 300 issues, including those on environmental clearances, on top of the 99 issues settled earlier, to improve the ease of doing business.
The panel has also prescribed a third party certification in most areas of regulation, jointly with sectoral regulators, in a planned and phased manner.
To boost the start-up eco-system, the committee has suggested measures, including earmarking of areas for start-ups through mixed land use redevelopment or greenfield development, and exempting them from the need to seek proper building plan approvals. The recommendations on start-ups were submitted with the government in November last year for it to come up with the start-up India action plan.
“Start-ups may be given the special dispensation of complying with labour laws on their own without being subject to inspection and/or enforcement for a period of three years, or, till their workforce exceeds 100, which ever is earlier,” the report said.
Some of the plans suggested in the report, such as no inspection of start-ups for three years, were slightly tweaked and announced by the Prime Minister at the Start-up India programme in January.
India is taking a series of measures to make it easier for investors to invest. Its ranking has been improved by four notches — to 130th from 134th — in the latest World Bank’s report on the ease of doing business.