Projects up to Rs 20 bn may not require CCEA approval

29 Jun 2023 CW Team

A government official, who chose to remain anonymous, mentioned that a proposal regarding this matter was being considered, and the finance ministry might issue a fresh guideline.

Currently, ministers have the authority to approve projects costing up to Rs 5 billion, while projects ranging from Rs 5-10 billion require the approval of the finance minister.

In 2016, the financial powers of the minister-in-charge were last revised to allow approval for both planned and non-plan schemes and projects of up to Rs 5 billion, an increase from the previous limit of Rs 1.5 billion.

The official expressed concerns about cost overruns and delays in project implementation, and suggested that faster clearances could help accelerate execution.

According to a report by the Ministry of Statistics and Programme Implementation in April, out of 1,605 infrastructure projects worth Rs 1.5 billion and above, 379 experienced cost overruns, and 800 were delayed. The original cost of these 1,605 projects was Rs 22.85 trillion, and their anticipated completion cost is estimated to be Rs 27.50 trillion, resulting in an overall cost overrun of Rs 4.6 trillion or 20.34% of the original cost.

During a chintan shivir (brainstorming meeting) on June 19, chaired by cabinet secretary Rajiv Gauba, there were discussions about raising the threshold for CCEA approval of projects. A senior government official, familiar with the deliberations, stated on the condition of anonymity that most ministries agreed to double the limit for general projects and triple it for infrastructure projects.

The Centre might eliminate the requirement for the approval of the Cabinet Committee of Economic Affairs (CCEA) for government projects costing up to Rs 20 billion. They mentioned that this would double the current threshold of Rs 10 billion, with the intention of expediting the execution process, particularly for infrastructure projects. A government official, who chose to remain anonymous, mentioned that a proposal regarding this matter was being considered, and the finance ministry might issue a fresh guideline. Currently, ministers have the authority to approve projects costing up to Rs 5 billion, while projects ranging from Rs 5-10 billion require the approval of the finance minister. In 2016, the financial powers of the minister-in-charge were last revised to allow approval for both planned and non-plan schemes and projects of up to Rs 5 billion, an increase from the previous limit of Rs 1.5 billion. The official expressed concerns about cost overruns and delays in project implementation, and suggested that faster clearances could help accelerate execution. According to a report by the Ministry of Statistics and Programme Implementation in April, out of 1,605 infrastructure projects worth Rs 1.5 billion and above, 379 experienced cost overruns, and 800 were delayed. The original cost of these 1,605 projects was Rs 22.85 trillion, and their anticipated completion cost is estimated to be Rs 27.50 trillion, resulting in an overall cost overrun of Rs 4.6 trillion or 20.34% of the original cost. During a chintan shivir (brainstorming meeting) on June 19, chaired by cabinet secretary Rajiv Gauba, there were discussions about raising the threshold for CCEA approval of projects. A senior government official, familiar with the deliberations, stated on the condition of anonymity that most ministries agreed to double the limit for general projects and triple it for infrastructure projects.

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