According to senior government sources, the Centre is toying with the idea of setting up a separate investment commission that can be the focal point for encouraging public, private and foreign investment in the country.

The sources said that Chidambaram had sounded out Prime Minister Manmohan Singh on the idea. "Investment is Chidambaram's pet idea. This could be his big Budget announcement," said a source.

The sources said the essential functions of the Foreign Investment Promotion Board might also be brought under the investment commission.

The organisational structure of the commission and its composition will be worked out once the proposal is approved by the prime minister.

The idea is to make it simpler for companies, Indian and foreign, to invest, especially in states. While the Planning Commission is concerned with the transfer of non-statutory resources to states, it is felt that a lot more is needed to attract foreign investment and make public-private partnership happen in states.

The sources said a major overhaul of the Planning Commission, too, was on the cards. "It is still being discussed if the Planning Commission can be rechristened the Planning and Investment Commission and if it can take on the additional task of investment promotion. But a concerted push for driving investment is definitely the need of the day," a source said.

The idea is likely to be considered favourably by the Left parties. "The National Democratic Alliance government created the divestment ministry. The United Progressive Alliance government, on the contrary, will set up an investment commission," said a senior government functionary.

He pointed out that on a visit to Mumbai earlier this month, Chidambaram preferred to be called minister for investment rather than finance minister.

While the government has not yet decided who will head the Planning Commission, Montek Singh Ahluwalia, director in the International Monetary Fund's Independent Evaluation Office, met Manmohan Singh again on Monday.

The sources said the new commission could be set up by the end of July after the Budget for 2004-05 was presented by Chidambaram.