In order to provide greater leeway to central government departments and ministries to finalise centrally-funded projects, the Department of Expenditure under the finance ministry has increased the financial limits of projects requiring approval from various cost-approving bodies.
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 Rs 150 crore (Rs 1.5 billion).
The previous limit was Rs 100 crore. Projects between Rs 75 crore (Rs 750 million) and Rs 150 crore will be approved by the minister-in-charge and minister of finance. Schemes requiring funds below Rs 75 crore will be cleared internally by the ministry.
A finance ministry official said the move was necessary considering the increase in project costs due to high inflation.
The financial limits for the scheme includes budgetary support, internal resources, external aid and loans. The guidelines will come into effect during the 11th Plan (2007-12).
Now ministries can appraise their own projects within Rs 15 crore under the revised guidelines, against the previous limit of Rs 5 crore (Rs 50 million).
For projects above Rs 150 crore, the appraisal will be carried out by either the Public Investment Board or the Expenditure Finance Committee (EFC). PIB considers projects where financial returns are quantifiable. The Expenditure secretary heads both the committees.
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