As part of expenditure reforms, the Finance Ministry has issued new guidelines to improve the efficiency of public schemes and delivery of goods and services to the public.
“The Department of Expenditure issued the guidelines on August 5 for appraisal and approval of public-funded schemes and projects. In order to build a growth-friendly ecosystem, financial processes and systems are as important as the fund allocations,” a ministry statement said here on Wednesday.
The implementing ministries have been delegated powers to appraise schemes and projects costing up to Rs 500 crore through their standing finance committees and delegated investment boards respectively, the statement said.
With the 2016-17 Union Budget announcing to do away with the ‘Plan’ and ‘Non-Plan’ distinction at the end of the 12th Five-Year Plan, it has become necessary to put into place a neutral appraisal and approval system, it said.
“The Department of Expenditure has, accordingly, undertaken a comprehensive review of the instructions issued over the last three decades, and replaced them with a simpler framework, which will greatly improve the efficiency with which schemes and projects are appraised and approved in our system,” it added.
“The new guidelines will help bring in the concept of outcome evaluation to improve the delivery of public goods and services to the citizens. This will indeed be a part of the major expenditure reforms initiated by the government in the last two years.”
The revised guidelines prescribe institutional arrangements and formats for appraisal and approval of schemes (programme-based costs centres for delivery of public goods and services) and projects (which involve one-time expenditure for creation of capital assets yielding financial/economic returns), the statement said.
“Specific time frame for appraisal have been laid down for speedier decision-making. The revised guidelines are forward looking and will help the departments restructure their schemes in a framework that is independent of the Plan and Non-Plan distinction,” it added.