Ministries can approve up to Rs. 500 cr. of non-Plan spending

According to the latest decision of the government, Ministers can now approve non- plan expenditure proposals of up to Rs 500 crore as against the earlier limit of Rs 150 crore.

Details:

• As per the new directives, competent authority to approve scheme/project between Rs 75 crore and Rs 500 crore will be the minister-in-charge of the ministry or department. Earlier, the minister had powers to approve proposals up to Rs 150 crore.
• Proposals up to Rs 75 crore can be approved by the secretary of the administrative ministry/department.
• In case of non-plan schemes entailing expenditure between Rs 500 crore and Rs 1,000 crore, the competent authority is the minister-in charge and minister of finance.
• Expenditure beyond Rs 1,000 crore require clearance of the Cabinet or Cabinet Committee on Economic Affairs.
• For faster clearance, the government has also raised the financial limit of projects that can be approved by officials.
• The government has also changed its rules to enable quick processing of any rise in project costs. A 20% 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.
• Also, 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.
• 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.

Non-Plan Expenditure committee with three members will be constituted in this regard. It will have Expenditure Secretary as chairman. The other members are — CEO of NITI Aayog and Secretary of the Department concerned.