Ministries can approve up to Rs. 500 cr. of non-Plan spending

Finance Ministry’s nod will be needed for expenditure between Rs. 500 cr. and Rs. 1,000 cr.

The spending autonomy of Ministries has gone up with the threshold of non-Plan project expenditure that can be approved by them raised from Rs. 150 crore to Rs. 500 crore, the Union government announced on Tuesday.

The Finance Ministry’s nod will be needed for expenditure between Rs. 500 crore and Rs. 1,000 crore, beyond which Cabinet approval would be required.

“With this enhancement of financial powers, the financial limits for appraisal and approval of Plan and non-Plan schemes/projects of Central government Ministries and departments have been brought almost at par,” the government said in a statement.

“This is expected to expedite the appraisal and approval process in the Central government Ministries/ departments.”

“This is a good thing, since it makes it easier to implement non-plan projects,” former Cabinet Secretary T.S.R. Subramanian told The Hindu.

“Earlier, Plan projects needed the approval of the Planning Commission and the Finance Ministry, which created two bottlenecks. Then, with NITI Aayog, this was removed. The new changes on Tuesday have now extended this independence to non-plan projects as well.”

Project appraisal

According to the revised guidelines, the Committee on Non-Plan Expenditure, an appraisal forum for all non-Plan proposals of the Centre, will now appraise proposals involving expenditure of Rs. 300 crore and above, the earlier limit being Rs. 75 crore.

The appraisal of non-Plan projects of less than Rs. 300 crore can now be done by the relevant Ministry.

“The independence given to the ministries in this regard means that projects that have been budgeted or committed to will not need to be delayed by a long formal approval process,” Mr. Subramanian explained.

Revised estimates

The government has also altered the rules with regard to the approval of revised cost estimated of projects.

“Increase in cost up to 20 per cent of the firmed up cost estimates can now be appraised by the financial adviser and approved by the Secretary of the administrative department, if the absolute cost escalation is up to Rs.75 crore, and by the administrative Minister-in-charge if absolute cost escalation is above this,” the government statement said.

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Printable version | Feb 21, 2020 3:27:39 PM |

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