1. Infrastructure Bottlenecks?
  2. What is National Investment Board (NIB)?
  3. Functions of National Investment Board (NIB)?
  4. Anti-argument/Objections against NIB?

Infrastructure Bottlenecks?

  • Infrastructure= railways, roads, ports, thermal plants etc. that are essential for other economic activities.
  • Infrastructure projects worth over Rs 7 lakh crore are pending because environment ministry is not clearing the files.
  • Every time a coal miner wants to increase production, he has to get fresh clearance from environment ministry. It is time-consuming. This has led to low coal-output= thermal power plants cannot produce much electricity =grid failure, as we discussed in earlier article CLICK ME
  • Another example: If you want to open a thermal power plant, you need to get a file cleared from the Coal Ministry. But to get that file cleared, you need to get environment and forest clearance from Environment Ministry. Even if environment clearance is given, forest clearance may take longer or even ultimately be denied. Thus, some power projects are not executed for several years, even after winning an auction.

National Investment Board

  • To extract bribes, the corrupt bureaucrats intentionally delay the files.
  • But sometimes even honest officials delay the files because of media-sensationalization, NGO-lobbies, CAG-activism, judicial activism, R.T.I activism…they fear if some scam comes out and if their signature is on the approval file, then they’ll get victimized or made scapegoats. So they too avoid taking decisions.

Because of ^these issues,

  1. There is huge infrastructure deficit (=not enough rails, roads, power stations, electricity output required to get 9% GDP growth).
  2. Delay in project= input cost increases= indirectly this leads to inflation (price rise)
  3. Because files are not cleared= production/construction doesn’t start= Less employment opportunities, directly (in the coal mine itself) and indirectly (in some xyz factory that will use that electricity).
  4. Government is unable to achieve the Five year plan targets. Check this table: Source: Department of Economic Affairs.

National Investment Board

What is National Investment Board (NIB)?

Chindu has proposed to setup this National Investment Board.

  • At present, the final decision/decisions are to be taken by one or more ministries.
  • This is the reason why a truly “final” decision does not emerge for many years, proposal files keep making merry go round from one ministry to another ministry.
  • Therefore, the power to take the final decision should be vested in separate board.
  • This would be called “National Investment Board”
  • Basically it’s a cabinet sub-Committee, chaired by the Prime Minister + FM, Law Minister as its members.
  • For granting/refusing FDI- approvals, there is already a Foreign Investment Promotion Board (FIPB). And it has lead to fast clearing of files and boosted investment.
  • NIB will provide the same benefits, especially in the infrastructure sector.
  • Prime minister has talked about a new phase of reforms unleashing animal spirits. Hunting is a prime example of the latter and it’s high time we created a body that went out and energetically sought investment for India amidst an exciting global jungle.

National Investment Board

Functions of National Investment Board?

  1. At first, NIB will focus on clearing investments project of Rs. 1,000 crore/more in roads, mining (especially coal), power, petroleum and natural gas, ports and railway projects.
  2. A dedicated secretariat (staff) will support NIB to identify and monitor key projects and sectors.
  3. In the long run, NIB will serve as an ‘arbitrator’ i.e. If a company feels that its applications for infrastructure projects has been delayed or even rejected by some Ministry or Department without sound reasons, then it can approach NIB for clearance.
  4. NIB will be to take over the process of granting licences, permissions and approvals whenever the respective ministries fail to act in time.
  5. Once the final decision is taken by the National Investment Board (NIB), no other Ministry or Department or Authority will be able to interfere with that decision or delay its implementation.


National Investment Board

  1. The main objective of NIB seems to shortcircuit or overtake Environment Ministry for granting project approvals. But NIB might end up approving projects that are not good from long-term environmental view.
  2. Creation of such an entity might lead to lax environmental standards and social safeguards (i.e. problems of displaced families because of a project).
  3. Government should worry about not just growth but green growth.
  4. NIB has no constitutional authority and its creation will decimate (wipeout) the role of the Environment ministry
  5. NIB will turn individual ministries and departments into rubber-stamps.
  6. Setting up NIB suggests that existing institutions are not functioning properly. But Creating more institutions to fix existing institutions, is like firefighting. The real long-term solution = re-write the office-manuals/ standard-operating-procedures for each ministry to prevent file-delays and the tendency to evade responsibilities.
  7. Many projects in the railways, coal, telecom, petroleum and power sectors are delayed due to “law and order problem” (=naxalites). NIB is no panacea for this.
  8. Speedy project clearances and implementation would require solutions at the district administration and state Government levels, where the NIB would not be of help as it will comprise representatives only from central ministries.


Which of the following statements are correct, regarding the Proposed National Investment Board?

  1. It’ll be headed by the Finance Minister.
  2. It’ll deal with granting/refusing the FDI in retail, aviation and power-sector.
Answer choices:
  1. Only 1
  2. Only 2
  3. Both 1 and 2
  4. None