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.

Raghuram Rajan coy about second term as RBI Governor

New Delhi has not yet asked Raghuram Rajan whether he would like to pad up for a second innings at the Reserve Bank of India after his term ends on September 4. In the past one month, there has been endless speculation about the equations between the government and the RBI governor — whether Rajan would be given a cold shoulder, or offered another term, or invited to play a different role.

"That question, I can't answer. First I have to be asked, 'Do you want to continue?' Then, I can answer," said Rajan at the Shiv Nadar University on Saturday when ET asked him whether he would like a second term as the RBI boss. There is a widely shared perception in financial markets and banking circles that the Centre may find it difficult to refuse a second term to Rajan if he were keen on continuing. But as of now, the Chicago school economist — who in the past three years has positioned himself as an inflation warrior — is keeping options open.

"I love teaching. I will go back to academia once I am done with my work here," Rajan said in a meeting with the Shiv Nadar University's faculty. The governor was the chief guest at the second convocation of the university, which was founded in 2011. Even though corporate India and local markets have criticised Rajan's policy to keep interest rates high and liquidity tight, foreign portfolio managers, who have gained from high rates and a stable rupee, have been vocal admirers of Rajan.

Last week, Christopher Wood, equity strategist at brokerage and investment group CLSA, said the biggest risk to the Indian bond and currency market will be if the RBI governor is not given a second term. "He (Prime Minister Narendra Modi) must recognise the constructive role played by RBI under Rajan in both imposing a tighter NPL (non-performing loan) system on banks, carrying out a stress test on banks and putting pressure on them to go after defaulting creditors," Wood wrote in the widely circulated CLSA newsletter.

Before taking over as the RBI governor in September 2013, Rajan was the chief economic adviser in the ministry of finance. Prior to that, he was a professor of finance at the University of Chicago Booth School of Business and chief economist at the International Monetary Fund. "I have no problems with India's growth. It could be better. The best is yet to come," said Rajan.

Rajan also stressed the need to have research-oriented universities. "As a country, as we grow in stature, we have to contribute ideas. We are always protesting — this doesn't look good, that doesn't look good. We are always underprepared and that's why we shout." Back in the '50s, he pointed out, ideas and concepts such as Panchsheel emerged in India, but today "we are a shouting lot".



"If we contribute ideas based on facts, based on research, we could very quickly become leaders," he said. Addressing students at the convocation, Rajan said, "India is changing, in many ways for the better. You will be able to help shape our country, the world, and your place in it. Play to your strengths." Referring to the Shiv Nadar University, founded by billionaire tech czar Shiv Nadar, Rajan said, "I would like to see places like this flourish. Thoughtful philanthropy, as reflected in the founding of this school, can further help enhance society's acceptance of great wealth."

However, adding a word of caution, the RBI governor said, "We should make sure that unscrupulous schools do not prey on uninformed students, leaving them with high debt and useless degrees." Greater Noida, where Shiv Nadar University is located, is emerging as an educational hub with around 50 colleges attracting students from across the country.

Tallest govt building: A 61-storey headquarter for Surat civic body on the cards

SMC officials said that they are checking the feasibility for this project on the 22,000 sq m land on the Ring Road where old sub-jail once stood

SURAT: The Chinese dragon has set tongues wagging in the Diamond City by proposing that it could help build a towering 61-storey headquarters for the Surat Municipal Corporation (SMC).

If the project, which sounds like a fanciful hope for now, is executed this could be the tallest government building in India. SMC has been operating from the historical Mughal Sarai building that was built way back in 1644 during the reign of Shahjahan.

The Chinese delegation comprising government firms that are into construction business had visited Surat last year and claimed that they could construct this fully environment-friendly skyscraper in very short time using pre-fabricated technology.

SMC officials said that they are checking the feasibility for this project on the 22,000 sq m land on the Ring Road where old sub-jail once stood. At least 13 consultants have been asked to prepare designs and submit them to SMC authorities for selection and approval.

Milind Torwane, municipal commissioner, said, "We are awaiting a feasibility report on building a multi-storeyed structure on the chunk of land with us. The mega project of SMC headquarters will take shape through public-private partnership (PPP)."

Standing committee chairman Rajesh Desai said, "We have to take a policy decision on linking the local body's administrative office with commercial establishments. It has not been seen anywhere else." He added, "We will have to shift the site if the 61-storey structure can't be built on the sub-jail land. We will soon take a decision on it."

Sources said that the concept of skyscraper for SMC headquarters was suggested by the Prime Minister's Office following which the Chinese team visited Surat.

Manoj Gandhi, India head of Anuj Infra Tech, which is an associate partner of seven companies of government of China, said, "Prefabrication construction technology means things are prepared in a factory and later assembled at the site.

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Govt manages to raise just Rs 1,400 cr via gold bonds

The third and final tranche of the gold bonds fetched about Rs 400 crore in March 8-14 as against Rs 1,050 crore in second tranche in January and Rs 246 crore in November.

The third and final tranche of the gold bonds fetched about Rs 400 crore in March 8-14 as against Rs 1,050 crore in second tranche in January and Rs 246 crore in November.

The Centre managed to raise just Rs 1,400 crore through the sovereign gold bonds or only 9% of the target of Rs 15,000 crore in the current fiscal year, sources said.

The third and final tranche of the bonds fetched about Rs 400 crore in March 8-14 as against Rs 1,050 crore in second tranche in January and Rs 246 crore in November.

Even though the performance of the bond scheme was weak, it was even weaker for the gold monetisation scheme, both launched simultaneously to curb gold imports. Till March 15, sovereign gold bonds equivalent to a little over 5 tonne of gold were sold to investors while the mobilisation of gold was less than 2 tonne under the gold monetisation scheme (GMS).

“Both the schemes will be streamlined after taking into the performance in the pilot period. There may be some changes, especially, in the GMS,” one official said.

The finance ministry has convened a meeting on Friday to discuss how to make the GMS more attractive. The meeting, to be chaired by economic affairs secretary Shaktikanta Das, is expected to be attended by financial services secretary and representatives of the commerce ministry, the Reserve Bank of India, the World Gold Council, the Indian Banks Association and leading banks like SBI and ICICI Bank. Gold refiners are also expected to attend. The ministry had made some changes to the GMS, aimed at channelising household and temple gold, in January.

On gold bond scheme, aimed at weaning away investors from holding physical gold, officials said the response to the third tranche was probably weak due to cash shortages with people as it was fiscal year-end. The Centre has set a target of raising Rs 10,000 crore through sovereign gold bonds in 2016-17, as part of its market borrowing programme.

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