To Boost Economy, PMO Investing Fund to Strengthen the ‘Construction Sector’, Creating Jobs
In a bid to boost the economy and strengthen the construction sector in the country, the PM Narendra Modi led government has instructed all ministries and departments to facilitate due payments to contractors and construction companies. The purpose is to invest the fund in the construction sector and generate more job opportunities.
In the past years, an increasing number of multi-crore infrastructure and construction projects got trapped in legal issues and court processes, effectively blocking the growth of India’s most encouraging business sector. Earlier, the construction sector was one of the biggest sectors that provided direct and indirect employment across the country.
In 2016, PM Narendra Modi had instructed NITI Aayog to uncover an improvement in this direction and later the Cabinet Committee on Economic Affairs (CCEA) approved several steps to inject funds in the construction sector. In spite of that, there are some legal troubles continued.
In a letter, dated 28th November 2019, the Project Management and Appraisal Division (PAMD) of Niti Aayog addressed the Union Law Ministry and the departments involved to assure that contractors are paid 75% of arbitral grants upon bank guarantee.
“The CCEA has analyzed the proposal of NITI Aayog on 20th November 2019 and has approved that 75% of such payments will be paid by the government entities to contractors upon a bank guarantee and not for its interest part,” says the confidential letter addressed to Cabinet Secretary, Law Ministry and other departments concerned.
The letter further explains that the Attorney General of India in discussion with the department of legal affairs will assure that the process of giving legal opinion to Government entities associating with payments will be completed within 30 days. In simpler words, the PMO wants that payments should not be subject to any more legal obstacles, and should be issued on a priority basis to invest the fund in the construction sector as soon as possible.
The letter of the Project Management and Appraisal Division (PAMD) says that all concerned ministries “shall issue guidance to respective government entities for exerting necessary action on the issue speedily”.
The instructions have to be given, says the letter, to “all Public Sector Undertakings of Central government, all self-governing organizations of Centre and companies wherein paid-up share capital of Central government is more than 50%.” Sources in the NITI Aayog said that the main goal of the government is to clear payment to contractors in a suggestion to strengthen the whole construction sector and conclusively boost the commercial ecosystem of the country which seems to be weakening.
