The Cabinet Secretariat has clipped the Home Ministry’s powers to grant security clearances for setting up or expanding existing business venture by forming an Inter-Ministerial Committee (IMC). The IMC will comprise officials of Finance, Corporate, Commerce Ministries and Niti Ayog and will have powers to veto Home Ministry’s opinions.
The order dated December 7 blamed the Home Ministry for hampering the “Ease of doing business” and coming in the way of inflow of investments by flagging security concerns against the promoters, companies and projects involved.
“Though many of the issues highlighted by the MHA/security agencies may be important, they may not be so vital as to necessitate stoppage of the said investment or project. However, the Ministry/Department or the State Government concerned is not able to or willing to take full responsibility in this regard. They are also not inclined to either allow or disallow the investment or project in the light of such observations of security agencies. Result is that many sizeable investments and projects having huge potential for creation of employment and rejuvenation of the economy are getting held up. This also clearly goes against the spirit of the ‘Ease of Doing Business’ on which Government has been working seriously for the last two years,” said the two-page order.
“In view of the above situation, it is necessary that there is a mechanism to take a holistic view of the observations made by security agencies on economic, corporate of criminal proceedings involving the proponent company or its directors,” it added.
As per the order, the IMC will review the remarks of the MHA or security agencies and if the persons or companies are not threat to national security, the projects will be given clearance. “Once this committee has seen the observations made by the MHA or the security agencies indicating that the investment/projects, its activities and/or directors are not a threat to national security, it will proceed to look into other observations.
“If other remarks or observations of the MHA or security agencies have been found to be inconsequential or irrelevant with regard to any other national or public interest, then the committee would record the same and recommend the investment/project,” said the Order, providing escape route to those persons or companies facing cases of economic offences or under the Prevention of Corruption Act.
The MHA and other Ministries were engaged in a bitter tussle two years ago over proposal to grant security clearance to Sun TV, when its owners Maran brothers were chargesheeted by the CBI and Enforcement Directorate for bribing and corruption in Aircel-Maxis scam and for setting up illegal telephone exchange. A series of letters between then I&B Minister Arun Jaitley and Home Minister Rajnath Singh were exchanged on this subject, both holding contradictory positions on the subject. later, the Home Ministry toned down its objections. Earlier, the I&B Ministry had shut many TV channels on adverse report given by the MHA, but the powerful South India’s media tycoons got the clearance for renewal of TV channel licences and attending auction of FM radios among other things despite serious case against the promoters.