Finmin issues norms to enhance efficiency of public schemes

As part of expenditure reforms, the Finance Ministry has issued new norms for efficient appraisal and approval of public funded schemes as well as to improve the delivery of goods and services to citizens.
Besides, it empowers ministers to approve expenditure proposals of up to Rs 500 crore as against the earlier limit of Rs 150 crore.
"In order to build a growth friendly eco-system, financial processes and systems are as important as the fund allocations," the Finance Ministry said in a statement today.
It added: "The Department of Expenditure, Ministry of Finance, has issued comprehensive guidelines on August 5, for appraisal and approval of public funded schemes and projects."

With the announcement in the Union Budget 2016-17 of doing away with Plan, Non-Plan distinction at the end of the 12th Five Year Plan, it has become necessary to put into place a Plan, Non-Plan 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," the statement said.

The new guidelines will help bring in the concept of outcome evaluation to improve the delivery of public goods and services to the citizens, it said, adding that this will 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 centers for delivery of public goods and services) and projects (which involve one-time expenditure for creation of capital assets yielding financial/economic returns)," the ministry said.
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, it said.
Specific timeframe for appraisals has been laid down for speedier decision making, it said, adding that the revised guidelines are forward looking and will help departments restructure their schemes in a framework that is independent of the Plan, Non-Plan distinction.