CCEA nod may not be needed for projects up to Rs 2,000 crore

The Centre could do away with the requirement of Cabinet Committee of Economic Affairs (CCEA) nod for government projects costing up to Rs 2,000 crore, doubling the threshold from Rs 1,000 crore at present, said officials.

The move is aimed at further expediting the execution process, especially of infrastructure projects, they said.

"A proposal in this regard is under consideration and the finance ministry may issue a fresh guideline," said a government official, who did not wish to be identified.


At present, ministers can clear projects costing up to Rs 500 crore, while projects between Rs 500-1,000 crore also require the finance minister's nod.

Financial powers of the minister-in-charge were last revised in 2016, to permit approval of both planned and non-plan schemes and projects of up to Rs 500 crore against Rs 150 crore earlier.

There is a growing concern about cost overruns and delays in implementation of projects, and it is felt that faster clearances can help accelerate execution, said the official.

According to the Ministry of Statistics and Programme Implementation's April report, out of 1,605 infrastructure projects worth Rs 150 crore and above, 379 reported cost overruns and as many as 800 were delayed.

Total original cost of these 1,605 projects was Rs 22,85,674.25 crore and their anticipated completion cost is likely to be Rs 27,50,591.38 crore, reflecting an overall cost overrun of Rs 4,64,917.13 crore or 20.34% of the original cost.

A suggestion to raise the threshold for CCEA approval of projects had figured in the discussions at a chintan shivir (brainstorming meeting) on June 19 chaired by cabinet secretary Rajiv Gauba.

"During the chintan shivir most of the ministries agreed that the limit for project approval must be doubled for general projects and tripled for infra projects," a senior government official privy to the deliberations said on condition of anonymity.

Another suggestion at the meeting was to allow ministries and departments to approve revised costs of infrastructure projects up to 33% in cases where the cost had gone up purely on account of increase in raw material prices. Currently, secretaries can approve an increase in cost of projects up to 20% of the total cost of the project or Rs 75 crore.

If the increase in cost is more than this, the minister-in-charge is authorised to approve it.