Earlier Prime Minister Narendra Modi's ministers could only sanction non-plan projects that cost less than Rs 150 crore.
Highlights
- Ministers dealing with non-plan projects could only sanction 150 crores
- Finance Minister final authority to clear projects worth 500-1000 crores
- Financial limit of projects to be approved by officials also raised
Prime Minister Narendra Modi, accused by his critics of micro-management and not enough decentralizing of power, today gifted his ministers more financial control.
Earlier, ministers dealing with non-plan spending could only sanction projects that cost less than Rs 150 crore. That limit has now been raised to Rs 500 crore.
The Finance Minister will remain the final approving authority for projects that cost between Rs 500 crore and Rs 1,000 crore. Bigger proposals involving over Rs 1,000 crore will need the go ahead of the cabinet or the cabinet committee for economic affairs.
For faster clearance, the government has also raised the financial limit of projects that can be approved by officials.
A Committee on Non-Plan Expenditure, which cleared all proposals worth over Rs 75 crore, will now have the power to assess proposals worth Rs 300 crore and more.
The government has also changed its rules to enable quick processing of any rise in project costs.
A 20 per cent increase in the cost of a project can now be assessed by financial advisers of ministries and approved by an officer. But if the absolute cost escalation is higher than Rs.75 crore, the minister will need to clear it.
Non-plan expenditure constitutes the biggest portion of the government's spending. A major part of non-plan expenditure is about interest payments, pensions, statutory transfers to states and Union Territories.