August 29, 2008

No cabinet nod required for projects below INR 150 crore

It is reported that the department of expenditure under the finance ministry has increased the financial limits of projects requiring approval from various cost approving bodies in order to provide greater leeway to central government departments and ministries to finalize centrally funded projects.

A finance ministry official said that the move was necessary considering the increase in project costs due to high inflation. The financial limits for the scheme include budgetary support, internal resources, external aid and loans. The guidelines will come into effect during the 11th Plan.

According to the new guidelines, ministries and departments will no longer have to seek approval from the cabinet or the cabinet committee on economic affairs for schemes involving expenditure below INR 150 crore as against previous limit of INR 100 crore. Projects between INR 75 crore and INR 150 crore will be approved by the minister in charge and minister of finance. Schemes requiring funds below INR 75 crore will be cleared internally by the ministry.

For projects above INR 150 crore, the appraisal will be carried out by either the public investment board or the expenditure finance committee. PIB considers projects where financial returns are quantifiable. The expenditure secretary heads both the committees. Now ministries can appraise their own projects within INR 15 crore under the revised guidelines, against the previous limit of INR 5 crore.