Government reworks norm, all projects need cabinet nod

NEW DELHI: Despite its earlier move to waive cabinet approval for projects of up to Rs 1,000 crore, the government has now asked departments to seek cabinet nod for new schemes, programmes and policy initiatives that impact other ministries even if the amount involved is below the earlier prescribed threshold.

The move, officials said, is prompting departments to go back to the cabinet for schemes that were already being implemented, holding up projects in several cases.

In August, the finance ministry had enhanced the power for appraisal and approval of public-funded projects up to Rs 1,000 crore at different levels within a ministry. Around a month ago, however, the cabinet secretariat issued a fresh office memorandum, saying "irrespective of the financial implications" proposals should be brought before the cabinet after following the prescribed process.

Instructing all departments to "strictly" comply with the new rule, the cabinet secretariat has said that it has noticed instances where some departments did not seek cabinet approval, citing the monetary threshold of Rs 1,000 crore. It said the monetary ceiling set by the finance ministry in August 2014 is for "specific investment proposals and projects".

Though the circular said the new norm will apply to schemes or policy initiatives with "generic pragmatic content" and principles that impact other ministries, irrespective of the financial implications, government sources said almost all new schemes will fall under this category.

"Invariably any new scheme by a department will impact other ministries or departments and so, we need to take cabinet nod after getting approvals at different levels, including that of the expenditure finance committee (EFC). This process will increase the time period to approve any project/ scheme and its rollout," said a government official.

Last August, the finance ministry had enhanced greater delegation of power in a graded manner. As per its circular, the administrative department could appraise projects/ schemes involving investment up to Rs 100 crore and the secretary in consultation with financial advisor could approve it.

Projects involving investment in the range of Rs 100 crore and Rs 500 crore could be appraised by the standing finance committee chaired by the secretary and could be approved by the minister concerned. Projects costing between Rs 500 crore and Rs 1,000 crore could be appraised by EFC/ public investment board chaired by the expenditure secretary and could be approved by the minister concerned and the finance minister.