The Finance Ministry on Wednesday released the contours of a proposed voluntary settlement scheme to bring to an end the long-festering contractual disputes of government agencies which, it said, are “not only holding back fresh investment but are also reducing the ease of doing business with the Government”.
Finance Minister Nirmala Sitharaman in her Budget 2023-24 speech last week had said standardised terms will be introduced for such a settlement scheme for disputes where the arbitral award is under challenge in a court. “This will be done by offering graded settlement terms depending on pendency level of the dispute,” she had said.
Called the Vivad se Vishwas II (Contractual Disputes) scheme, the “one time settlement” scheme circulated for stakeholders’ feedback, contains a draft agreement between the litigating parties to bring finality to the contractual dispute settlement and is proposed to be implemented through an online functionality on the Government e-Marketplace (GeM), portal.
The scheme will offer settlement for all disputes with Central government agencies, including autonomous bodies, public sector banks and financial institutions, central public sector firms, union territories and the National Capital Territory of Delhi and their agencies. Organisations like metro corporations, where the Centre has a 50% stake, can choose to opt out of the scheme at their discretion after securing board approvals.