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India's ambitious plan to cut red tape gets tangled in ... red tape

Published on Nov 12, 2012 7:41 AM

NEW DELHI (REUTERS) - India's boldest attempt in two decades to sweep away the remnants of the "Licence Raj" permit system that has crippled infrastructure development has fallen victim to the very scourge it was designed to defeat.

A proposal for a government panel chaired by Prime Minister Manmohan Singh to fast-track major infrastructure projects and boost a flagging economy seems to have stalled amid bickering between the finance and environment ministries over its powers, and an apparent reluctance to proceed without consensus.

The dispute underscores the fears of investors and business leaders that New Delhi's new-found reformist zeal could be undone by a lack of governance and political will to drive further economic liberalisation.

The brainchild of India's new finance minister, P. Chidambaram, the proposed National Investment Board (NIB) was expected to win swift passage through the cabinet last month. But it has yet to make it on to the weekly agenda.

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