Monday, 29 August 2016

Finance ministry releases revised guidelines for public-funded projects

The government in the Union Budget 2016 had announced to do away with plan, non-plan distinction at the end of the 12th five-year plan



The finance ministry has come out with revised guidelines for public-funded projects under which schemes should be designed keeping in view economies of scale and the need to share implementation machinery.
The streamlining of the public-funded projects is aimed at expediting implementation and reducing time and cost overruns, an official said.
The government in the Union Budget 2016-17 had announced to do away with plan, non-plan distinction at the end of the 12th five-year plan.
After that announcement it was imperative that a plan, non-plan neutral appraisal and approval system is put into place, the official said.
The quality of scheme or project formulation is the key bottleneck which leads to poor execution at the implementation stage including time and cost overruns.
“While designing new schemes/sub-schemes, the core principles to be kept in mind are economies of scale, separability of outcomes and sharing of implementation machinery,” the officials said.
“Schemes which share outcomes and implementation machinery should not be posed as independent schemes, but within a unified umbrella programme with carefully designed convergence frameworks,” the official added.
Further, as per the revised guidelines, no new autonomous body, institution or other special purpose vehicle should be set up without the approval of the cabinet. The 12th five-year plan ends next year.

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