By RAMRAI NAIK
The fate of 27 projects is now in the hands of KPMG’s review process
Goa Investment Promotion & Facilitatio Board (IPB) has been thoroughly criticised ever since its formation. The sole purpose for which it was formed hasn’t been yet fulfilled, with the questions raised on the investment friendliness of the state, consistently.
The state government through IPB has appointed satellite consultant KPMG for reviewing the investment projects that have come to the state. IPB has clarified that all the projects henceforth will be forwarded to the firm after they have been assessed at the board level. Referring with the consultant “would not mean that projects have been rejected”, IPB has stated very categorically that this is for the purpose of analysing if the investors fulfil several socio-economic conditions of the state and doesn’t make false claims beforehand.
KPMG is a professional service firm headquartered in Netherlands and their line of services include tax, audit and advisory. Despite global presence, the company works independently as a legal entity in each nation that it serves. KPMG India was also handed over the responsibility of developing the Tourism Master Plan for the state of Goa previously.
Explaining the reason behind the appointment of the consultant, CM and Chairman of IPB Manohar Parrikar said, “KPMG is a firm of world repute. They fulfilled our requirements and were found to be the best in this field. Everyone in the government cannot be an expert in understanding nuances of investment. Investment is a very complex subject as it involves investing in economy, manpower, resources, technology and might also have an impact on the environment. We get a lot of proposals for projects in Goa. However, we are a small state, we have to be very careful about accepting any project.”
“We will prefer projects which are non polluting, are employment oriented of which manpower is available with the state. The consultant will ensure that whatever information and index the investor has proposed is correct and is favourable for the Goan industry,” Parrikar added.
KPMG will be on board by August 2017, and would get a year long contract which might be further extended based on their performance. KPMG will assess the projects and based on that will make recommendations; however the final decision will be taken by IPB chairman.
KPMG is a professional service firm headquartered in Netherlands and their line of services include tax, audit and advisory. Despite global presence, the company works independently as a legal entity in each nation it serves
The decision comes at the backdrop of certain ‘invalid’ approvals given to projects under the previous IPB chairmanship of Laxmikant Parsekar. The approvals were declared invalid as private members were given an extension over and above their 2 years tenure, without notifying.
IPB was first notified in October 2014 and in October 2016 the tenure of all the private members from various industry bodies and other non governmental representatives had ended. Hence the 13th and 14th meeting were termed invalid, which were conducted in the following months.
The newly constituted board however, re-examined all the projects approved in the previous meetings. Further, the Board also sent them to the satellite consultant for in-depth analysis. The fate of 27 projects is now in the hands of KPMG’s review process; while some have already started executing their proposals on the ground.
Single Window Clearance
Questions have been raised on the effectiveness of the IPB, which was supposed to facilitate single window clearance. Especially the mega proposals which promise employment opportunities and revenue to the state. Goa is still in the preliminary stages when it comes to an ideal single window clearance.
A study report on ‘Ease of Doing Business in Goa’ prepared by Goa Chamber of Commerce and Industry with Goa Institute of Management has stressed on the need for strengthening the IPB through an amendment. “It would be ideal if IPB is transformed into a single authority from its current status of a single window. Such a change in the mandate necessarily requires legislative amendment and competency building within IPB itself. It should also opt to have a dedicated technical wing that can carry out a comprehensive evaluation of projects as a precursor to decision-making. The overall agenda ought to be to demonstrate to investors that IPB’s approval is the one and only prerequisite for setting up large projects in the State of Goa,” the joint report recommended.
When asked about the EoDB rankings, CM Parrikar said there are several parameters that are still needed to be in place, therefore admitting the failure of his predecessor’s regime. Nonetheless, he assured, “henceforth Ease of Doing Business will be there for all the investors.”
Atrey Sawant, newly appointed member of IPB Goa and Chairman of CII Goa Council, commented about the positive approach on single window clearance. “We are looking very positively at the single window clearance, so that interaction between the investors and various government departments is reduced. At the same time, IPB will coordinate with the concerned departments to speed up the process,” he said.
Girish Bharne, another newly appointed member of IPB Goa and Centre Head at Persistent Systems sharing the importance of the IPB says, “We are doing consistent improvements when it comes to IPB. When we are reviewing any kind of projects there comes lot of challenges, we try to find out solutions to overcome them. As this will be the instrument of industrial growth in the state.”
The current alliance partners in the BJP led coalition government were previously vocal critics of the IPB and had demanded to scrap it completely. Many in the business circles feared, as any such drastic move would largely harm Goa’s business and investment prospects.
Having not gone into that extent, the leadership in Parrikar has settled to please his political allies by keeping investment policies strictly centric to state’s socio-economic ethos.
The political compulsion of Parrikar’s government clearly reflected in its Common Minimum Programme (CMP). Pre-poll promises made by its ally Goa Forward were given its due importance. The government has introduced incentives to those investors employing more than 80% locals, something which was high on GFP party’s agenda. Similarly ‘necessary amendments to the IPB act’ found its mention on the CMP document.
The chairman (Chief Minister) of IPB in his capacity has assured to issue the approvals at the earliest but only time will tell how the satellite consultant would scrutinise several proposals and at what length. And would the IPB always rely on the consultants or would it build an in house team to assess the projects in the future?
“KPMG is a firm of world repute. They fulfilled our requirements and found to be the best in this area of field. Everyone in the government cannot be an expert in understanding nuances of investment. Investment is a very complex subject as it involves investing in economy, manpower, resources, technology and might also have an impact on the environment. We get lot of proposals for projects in Goa. However we are a small state, we have to be very careful about accepting any project.”