Ajay Shankar Committee recommendations on Prior Permission and Regulatory Mechanisms

The Government-constituted expert committee to examine the Possibility of Replacing Multiple Prior Permissions with Pre-Existing Regulatory Mechanism submitted its recommendations in the fourth week of February 2016.

The Expert Committee was constituted by Department of Industrial Policy and Promotion (DIPP) in April 2015 to examine the possibility of replacing multiple prior permissions with a pre-existing regulatory mechanism with adequate safeguards.

The 11 member committee was headed by Ajay Shankar, Former Secretary of DIPP.

Key recommendations of the committee are:

Regulatory Impact Assessment: Continuing Process

• There is need for a standing institutional mechanism within government for an Independent Regulatory Impact Assessment on an on-going basis of the existing regulatory requirements and proposed new ones across the entire range of economic activities.

Inventory of clearances

• It was recommended that the listing of clearances at the level of the Union Government and State Governments should be evolved in an open source Wikipedia type of process in which all concerned stakeholders can participate.

Standards

• There should be a greater willingness to adopt the standards that are in force in developed mature markets as this will enhance global competitiveness for Make in India.

• CODEX Food Standards should be made automatically applicable in India from the date of notification by CODEX and firms should not need any permission to introduce food products in the Indian market conforming to the relevant CODEX Standard.

• An efficient system of regulatory approval of conformity to standards is essential for new products to be acceptable to doctors and patients.

Third Party Certifications

• Credible Third Party Certification may be introduced in most areas of regulation jointly with sectoral regulators in a planned and phased manner from prospective dates.

• For better compliance and credibility of the process, some percentage of Third Party Certification would need to be subject to random concurrent audit with stiff penalties cumulatively leading up to even withdrawal of accreditation for laxity.

Environment Clearances

• India should seek to adopt global Best Practices in setting up standards and norms for emissions, effluents and solid waste for different categories of Industries.

• Promoters of Industrial Parks, Zones and Areas may be allowed to obtain Environment Approval for their whole area for setting up of identified environmentally homogenous or similar industries with a specified level of final gross annual production and environmental load.

• For globally mature industries such as steel, cement, power etc. for which international environment standards exist, environmental appraisal need not go into the internal processes by which prescribed norms would be complied with.

Geographical Planning

• The Ministries of environmentally sensitive sectors such as power, petrochemicals & chemicals, pharmaceuticals and steel should, jointly with the MoEFCC, work out a 20-year perspective geographical plan indicating preferred locations in prioritised categories for their anticipated projects, so that the negative impact on the environment is minimized.

Forest Clearance

• A GIS-Digital map based inventory of the forest cover in the country has now been created. It is recommended that this database be used for taking decisions regarding approval of proposals for diversion of forest land for a project, as well as for determining the Net Present Value (NPV) of the forest cover on the land proposed for diversion as well as the cost of compensatory afforestation.

• MoEFCC in partnership with State Governments may create Land Banks for compensatory afforestation.

• Ministries of environmentally sensitive sectors should join with the Ministry of Environment and Forests to prepare a 20 year perspective geographical plan.

Start-ups

• Areas for start-ups through mixed land use re-development or greenfield development may be earmarked.

• For specifically identified activities from amongst the environmentally Green categories of industries, no municipal licenses and Pollution Control Board permissions should be required for Start-ups.

• Start-ups may be exempted from the requirement of seeking building plan approvals.

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