27-Sep-2017: States will have to compete for central projects
The Centre has decided to adopt the so-called challenge method for awarding all projects to states so as to bring in speed, efficiency and transparency, besides putting an end to allocation of big projects on political consideration.
Under this method, prospective states will be rated on more than half-dozen parameters prescribed in the guidelines issued and the project will go to the state with the highest score on a scale of zero to 100.
The challenge method for selecting the state as well as the site for the projects, which can be both brownfield and greenfield projects, will now be applicable across sectors such as aviation, roads, railways, health, education, IT, power and textiles. It will also be used for awarding all national events such as national games and youth festivals to states.
This is expected to spur competition among states and union territories both in terms of offering the best sites and committing resources in terms of land, utilities, infrastructure support and financial contribution, which in turn would encourage optimum utilisation of scarce resources and help in timely completion of projects. Awarding projects based on the challenge method will ensure due diligence is being done by all departments and states. This will also mean that gestation period for all these projects will come down significantly and there will be no major delays and this will give enough push to efficiency.
19-Apr-2017: Cabinet approves permission to avail external assistance by State Government entities from bilateral agencies
The Union Cabinet has approved the policy guidelines to allow financially sound State Government entities to borrow directly from bilateral ODA (Official development Assistance) partners for implementation of vital infrastructure projects.
The guidelines will facilitate the State Government entities to directly borrow from the external bilateral funding agencies subject to fulfilment of certain conditions and all repayments of loans and interests to the funding agencies will be directly remitted by the concerned borrower. The concerned State Government will furnish guarantee for the Loan. The Government of India will provide counter guarantee for the loan.
Several State agencies are implementing major infrastructure projects of national importance. These projects, even if viable and sound, have huge funding requirements and borrowing by the State Governments for such projects may exhaust their respective borrowing limits. Therefore, in order to accelerate the pace of investment in major infrastructure projects in the country without compromising the need for external assistance for other sectors, this enabling provision in the existing guidelines was considered necessary to facilitate direct borrowing by the State Government entities from bilateral external agencies.
Presently, external development assistance from bilateral and multilateral sources is received by the Government of India: For projects/programmes in the Central sector. For projects executed by Central Public Sector Undertakings. On behalf of the State Governments for State sector projects/programmes to be implemented by the State Governments and/or local bodies and public sector undertakings. The existing guidelines do not allow direct borrowings by the State Government entities from external agencies.