A key right from Telangana

Even as the Central government fights to create a business-friendly environment, the brand-new Telangana government led by K. Chandrashekar Rao has walked the talk by announcing a unique and highly welcome Right to Clearance policy. This is a significant move in the new State’s industrialisation programme, and could prove to be a crucial differentiator in the near future. Akin to the Right to Information, the Right to Clearance recognises that businesses have the right to know why project proposals are being delayed and to demand redress for unnecessary procrastination. Bureaucratic red-tape and corruption have not really come to an end in India despite the death of licence raj; industries are still at the mercy of whimsical policies and procedural nightmares. The Right to Clearance will involve a provision to impose a fine of Rs.1,000 on officials for each day of delay in granting clearance to a project, besides allowing businesses to know the exact reason why a proposal is stuck. It also lays down a 15-day time limit for the clearance of mega-projects involving over Rs.200 crore, and of one month for smaller projects. If government departments miss the deadline, the project will get automatic deemed approval. These, and other features such as single-window clearances, automatic renewals and self-certification, will go a long way towards creating an ecosystem that eases doing business in the State. The opportunity costs of clearance delays are enormous. Such cost and time overruns impact the viability not just of industries but also of lending institutions. Across the country, projects worth crores of rupees are mired, awaiting clearance.

It is this fact that makes the Chandrashekar Rao government’s move particularly laudable. Naturally, it has been welcomed by leading industrialists, with some of them already announcing projects. They now have a sense of reassurance and renewed belief that the Telangana government is serious about creating an outstanding industrial hub. Extending the out-of-the-box thinking, the Chief Minister has assured industry of “a graft-free and hassle-free system” that will remove lobbies and middlemen. Moves such as this will help rid the bureaucracy of inertia, and inject a sense of urgency and responsibility into the system. The Telangana government’s move not only empowers industries but also raises the bar considerably, and other States will have to match the offer if they don’t want to lose out amid the growing inter-State competition for investment. There is, however, one thing the government must note. Project-appraisal is not only about speedy clearances. Proper due diligence is also a sine qua non for clearance. Speed should not result in ill-conceived or poorly-structured projects being rushed through, and it is to be hoped that the policy will also ensure that.

Source: The Hindu

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