1

Government of India

National Institution for Transforming India (NITI) Aayog

(Project Appraisal and Management Division)

*****

Subject: Guidelines for grant of In Principle Approval (IPA) and Appraisal of Schemes/

Programmes/ Projects in NITI Aayog for 2015-16 – regarding.

The 12th

Five Year Plan is now in its 4th

year of implementation and will conclude in

2016-17. Therefore, it is necessary to ensure that new Schemes/Programmes are not

introduced on a stand alone basis without adequate budget provisions in this year and the next

year. In the case of projects, since all cost estimates are contingent on timely completion of

the project any proposal for a new project needs to be justified in terms of its feasibility and

cost, subject to provision of funds for the entry project to be ringfenced and assured until

completion.

02. In addition, the Annual Plan discussions that were held with the erstwhile Planning

Commission by Ministries/Departments have been discontinued. The annual allocations

under Plan are now in accordance with BE 2015-16 for the respective Ministries

/Departments.

03. Vide Notification dated 21st March 2015, the Allocation of Business Rules 1961 have

been amended to delineate the functions to be performed by NITI Aayog, that, inter alia,

includes

“To actively monitor and evaluate the implementation of programmes and initiatives,

including the identification of the needed resources so as to strengthen the probability of

success and scope of delivery”.

04. In view of the above, the existing guidelines for grant for ‘In-Principle Approval’

(IPA) have been examined de novo. On overall consideration, it is felt that the IPA process

as was being followed here to before has lost its relevance. Now, therefore, it is advised that

the following procedure be followed for BE 2015-16 in respect of new

Schemes/Programmes/Projects, that are sent by Ministries/Departments.

05. Central Sector Schemes/Programmes

(i) New Central Sector schemes/programmes which have been included in the budget

of the respective Ministries/ Departments for 2015-16 with full provision of

resources will not require IPA. Such proposals will be taken up for appraisal by

the concerned SMD/PAMD, as the case may be, in line with the procedures

detailed in these guidelines.

(ii) New Central Sector schemes/programmes which have been provided only a token

provision in the budget for 2015-16 or no provision at all would require, the

concerned Ministry/Department to submit the proposal in the prescribed SFC/EFC

format indicating inter alia:

2

Whether scheme/project/programme is part of the Finance Minister’s

Budget Speech 2015-16 with a full reference to the para in the Speech;

Whether the Proposal is to merge and/or include the new

scheme/programme/project with an existing scheme/programme/project

being implemented in the Ministry/Department;

Whether funding proposed for the scheme/programme/project and budget

available in 2015-16;

Whether quantifiable outcomes are expected from the scheme/programme;

and

Whether Concurrence of FA/IFD of the Ministry/Department concerned

has been obtained.

06. Projects in the following cases, NITI will not be required to process the proposal for

IPA:

New Coal and Power projects;

New Railway projects of national and strategic importance, for which

selection criteria has been approved by the Cabinet; and

New projects which have been included in the budget of the respective

Ministries/ Departments for 2015-16.

07. Railway Projects: In the case of all new railway projects (barring national and

strategic projects) which have been included in the budget of Ministry of Railways for 2015-

16 the following procedure shall be followed:

Processing of proposals will be in a single batch for all new projects in each

category such as Electrification, Doubling, etc. so that an integrated and holistic

view can be taken of the project timelines and cost estimates, if available;

All project proposals shall first be examined by a group comprising Advisor

(Transport) and Adviser (FR) in NITI Aayog and ED (Planning)/ ED (Rly

Electrification)/ED (Works), Railway Board which will prepare a shortlist of

projects, their prioritization and commitment for availability of funds;

Subsequent to the above, the MOR will circulate the SFC/EFC/PIB memo, as

the case may be, for each of the projects separately for appraisal and approval by

the Competent Authority; and

Proposals for material modifications in the approved Railway projects would not

require IPA and shall be processed as per extant guidelines for Revised Cost

Estimates (RCE) proposals.

08. Centrally Sponsored Schemes (CSS) No proposal for a new Centrally Sponsored

Scheme or a Sub component thereof shall be considered during 2015-16, without due

approval of the Competent Authority.

09. Delegation: All SFC proposals (up to Rs.500 crore), will be submitted by SMD to

CEO, NITI Aayog for approval. PAMD will appraise the proposal and submit the case to

3

CEO, NITI Aayog for approval of all other cases to be processed in accordance with the

delegation orders of the Ministry of Finance (Annexure-I)

10. SFC proposals: As per revised financial threshold of SFC proposals w.e.f. 29th

August 2014, new/ongoing schemes/programmes/projects costing up to Rs.500 crore or less

are to be processed for comments by the SMD and comments will be issued by SMD with the

approval of CEO, NITI Aayog. The Appraisal Grid adopted by PAMD for EFCs at

Annexure-II may be adhered mutatis-mutandis by SMDs while appraising /commenting SFC

proposals valuing up to Rs.500 crore as per existing delegation orders.

11. EFC/PIB proposals: As per revised financial threshold of EFC/PIB proposals

PAMD is responsible for appraisal of EFC/PIB proposals valuing >Rs.500 crore including

Railway projects. All other cases, i.e., SFCs, Cabinet notes and proposals coming from the

Departments outside the purview of the EFC/PIB will be processed by the concerned SMDs.

12. Checklist: For facilitating scrutiny of proposals received from

Ministries/Departments, a checklist has been prepared and is attached with these guidelines at

Annexure-III. The SMDs shall submit the completed checklist along with their

comments/observations for both SFC and EFC proposals. Therefore, NITI Aayog will

continue as the secretariat for the Standing Finance Committee/Expenditure Finance

Committee/Public Investment Board/PPP Appraisal Committee chaired by Secretary of the

Ministry/Secretary, Department of Expenditure, Secretary, Department of Economic Affairs

respectively.

13. Time Frame: As per Cabinet Secretariat OM No. 1/28/1/2009-Cab dated 3rd

December 2009, the time limit for completion of appraisal by appraising agencies in the NITI

Aayog is 4 weeks.

14. Process: SMDs should send their comments to PAMD, and not to the

Ministry/Department, within ten days of receipt of the EFC/PIB Memo from the

Ministry/Department.

15. The Ministries/Departments are required to ensure that two copies of SFC/EFC/PIB

proposals are sent to the NITI Aayog, one copy to Adviser (PAMD) and the other to Adviser

of the concerned SMD. In the event that a scheme/programme/project proposal is received by

only one of the Divisions (PAMD/Subject Division), the receiving Division will forward a

copy of the proposal to the other Division immediately.

16. The Ministries/Departments would be requested to also send soft copies of all

EFC/PIB/EBR proposals to Adviser PAMD by email at: p.mahto@nic.in.

17. A copy of the Appraisal Note issued by NITI Aayog would be marked to Vice Chairman

(VC), CEO and concerned Adviser in NITI Aayog. The Adviser of the SMD may refer

recommendations made by EFC/PIB while commenting on the Note of CCEA/ Cabinet for

approval.

18. Tracking: Position of EFC/PIB/EBR proposals pending for appraisal and proposals

awaiting comments of Subject Divisions will be reviewed and report sent to CEO, NITI by

5th

of every month.

4

19. EFC/PIB/EBR Meetings: Representative of PAMD will attend the meetings of

EFC/PIB and representative of SMD will attend the meetings of SFC. Representatives of both

PAMD and Subject Matter Division will attend EFC (proposal costing between Rs.500 crore

and Rs.1000 crore) chaired by Secretary of the administrative Ministry/ Department and the

Pre-PIB meetings.

20. The above appraisal and approval procedure would also apply for proposals of

Revised Cost Estimates.

This issues with the approval of CEO, NITI Aayog.

Sd/

(Rakesh Ranjan)

Adviser (PAMD)

Principal Advisers/ Sr. Advisers/ Advisers/ Consultants of all Subject Divisions,

NITI Aayog.

-------------------------------------------------------------------------------------------------------

NITI U.O. No. O-14015/02/2015-PAMD dated 29th

June 2015

Copy for information to:

1. PS to Vice Chairman/ PS to MoS/ PS to All Members/ PPS to CEO/PS to SS&FA/

All PAMD Officers/Guard file (PAMD), NITI Aayog.

2. Joint Secretary (PF-II) Department of Expenditure, North Block New Delhi.

Copy forwarded for information and guidance to:

1. Secretaries of All Ministries/Departments

2. Chairman, Railway Board, Rail Bhawan.

3. All Financial Advisers of Central Ministries/ Departments.

4. Joint Secretary, PMO.

5. Joint Secretary, Cabinet Secretariat.

Sd/.

(Praveen Mahto)

Adviser (PAMD)

15th

July 2015

5

6

7

8

9

Annexure-II

IPA for new Schemes/Programmes: Checklist for SMDs

I. Possibility of Merging new Scheme with Existing Schemes/Programmes:

Check points Yes/No

i. Whether the existing schemes/programmes being implemented by the

Ministry / Department has been examined by the SMD?

ii. Whether any of the existing schemes/programmes have a similar/

overlapping objectives as proposed in the new scheme?

iii. If the answer to (ii) above is yes, then

a. Whether the Ministry /Department has examined the possibility of

merging the new scheme with the existing scheme or modifying the existing

scheme for meeting the objectives envisaged for the new scheme and the

details included in the SFC/EFC note.

b. If no, whether the SMD has taken the matter with the

Ministry/Department for furnishing the details?

c. Has the requisite information been received from the

Ministry/Department?

d. If the answer to (a) or (c) above is yes, then whether the SMD agrees with

the views of the Ministry/Department?

e. In case SMD does not agree with the views of the Ministry/Department,

whether the same has been conveyed to the Ministry/Department and the

outcome thereof?

iv. If the answer to (ii) above is no, whether the SMD agrees with the

justification provided by the Ministry/Department for introduction of the

new scheme.

v. In case SMD does not agree with the justification provided by Ministry/

Department for introduction of the new scheme, whether the same has been

conveyed to the Ministry/Department and the outcome thereof?

II. Funding arrangements:

i. Whether the Ministry/ Department has provided details on the funding

arrangements proposed for meeting the fund requirements?

ii. If yes, whether the SMD concurs with the proposed arrangements?

iii. In case SMD does not concur, whether the same has been conveyed to the

Ministry/Department and the outcome thereof?

10

Annexure-III

Appraisal Grid for SMDs on SFC Proposals

Part I-Project Profile:

1) Project Summary:

Table I

Title of the Scheme

Nature/type of scheme (Centrally Sponsored / Central Sector etc)

Cost of the scheme as proposed

Annual Plan/Budget allocation

Annual Phasing of Expenditure

Rs in cr

Rs in cr

Funding pattern Share of each contributor

Table II

Objectives of the

scheme

(Describe in bullets)

Outcomes (Describe in bullets)

Beneficiaries Targeted Farmer/ Manufacturer / BPL families etc

Spatial Coverage All States, select state/ region/ pilot

Implementing agency

Manpower Requirements Existing, New

2) Approval of SFC sought for-

3) Brief Background & Justification Problems to be addressed

Demand Supply Gap identified

Date of origin of scheme (if continuing), Need for continuation

Balance work/ committed liabilities of previous plan period/s

4) Alignment of scheme objectives with the plan objectives/ priorities

5) Evaluation report on past Performance (in case of on-going schemes) - details

including name of agency, time-period, methodology, sample size, major

findings, suggestions etc.

6) Physical and Financial Performance in previous Plan (if continuing scheme)

Table III

Component Physical Target Cost (Rs.)

1

2

3

7) Physical and Financial targets in XII plan

Table IV

Component Physical Target Cost (Rs.)

1

2

3

11

8) Scheme Design

Brief on Scheme design/ Business model

Alternatives available & Overlaps with other schemes

Proposed Administrative design & delivery mechanism

Status of Statutory/ Mandatory clearances

Project Preparedness details

9) Financial Aspects

Item-wise Cost estimates: Table V

Expenditure Head

(Non- Recurring / Recurring expenses)

Total

(Figs. in Rs. crore)

Item-wise Non-Recurring exp.

Item-wise Recurring exp.

Grand Total

Year-wise sources of Financing: Table VI

Source of Financing Year 1 Year 2 Year 3 Year-4 Year-5 Total

Budgetary support

IEBR/ Loan

Foreign funding (including

foreign aid/ grant)

State's contribution

Institutional agencies/

Voluntary bodies

Donation

User Charges/ Beneficiary

contribution

Private sector contribution

Others, (please specify)

Total

10) Proposed Fund-flow mechanism (preferably in form of flow-chart)

11) Project management

Implementation schedule- {PERT/Bar Chart)

Mode of Implementation

Implementing Agencies

Manpower Requirements (New, outsourced, deployment etc.)

12) Monitoring & Implementation

Monitoring Mechanism, whether MIS in place

Nodal Officer

13) Viability/ Cost Effective Analysis

Project Viability (for commercial projects)

Sensitivity analysis/Risk Analysis

Cost effective analysis (for Social Sector schemes/programmes)

12

Part II- Appraisal by NITI Aayog

14. Need & Justification (critical observations on plan priorities & demand-supply gaps

and alignment with RFD targets)

15. Funds Availability (need to ensure conformity with the Annual Plan /Budget

allocations)

16. Changes proposed in scheme- In case of ongoing schemes comparative statement

highlighting changes in the activities, coverage, cost, funding pattern etc.

17. Project Design

Observations/ comments on Scheme design/ business model/ Technical aspects/ site etc.

(consider those benchmarks relevant to the proposed scheme/project which would

enable progress towards Outcomes and Outputs).

Coverage/ Scope (to ensure inter-regional equity)

Critical evaluation and comparison of the alternatives

Overlap of the scheme with other schemes (suggest possible convergence of the

schemes)

Comments on status of Statutory & Mandatory clearances (Land Acquisition,

Environmental Forest, techno-economic clearances from CEA/ CWC, E&F etc.)

Delivery mechanism – highlight the strengths and weakness of the proposed delivery

mechanism

Observation/ comments on Sustainability and Exit Strategy of the scheme, if relevant

User charges vs. Subsidies

Whether scheme provides for Community partnership/ ownership

DBT mode of payment to individual beneficiaries

18. Project Management:

Commitment of State Governments to participate both in implementation & funding (in

case of CSS)

Human Resource Capabilities

Stakeholder’s Involvement and engagement

Capabilities of agencies involved & Mode of implementation

19. Cost Estimates

Validity of Cost Estimates: Are all aspects of cost taken into consideration and provided

for with reasonable estimations of various items?

Review of cost benchmarks (as per norms prescribed by CPWD, MCI, CEA etc.)

Basis of cost estimates (constant prices) - to check updatedness (preferably not more

than 6 months old)

Foreign exchange component, if applicable

20. Comments on additional Manpower requirements proposed for execution of the

project/ scheme considering the implementation mechanism, cost estimates and funds

availability.

13

21. Financial Aspects

Sources of Financing and Funding Gap in 12th

Plan/Annual Plan, if any, with details of

re-appropriation of funds within approved outlay of the Ministry/Department.

Comments on Funding pattern (sharing of funds)

22. Viability/ sustainability of parameters – FIRR, ERR, units of cost estimates, Benefit

cost ratio etc., as applicable.

23. Comments on following aspects of Evaluation report (for ongoing schemes):

Methodology

Sample size

Evaluation parameters

Findings/ recommendations

24. Suggestions for Evaluation criteria:

Success indicator as per RFD

Key Performance Indicator- derived as per XII Plan outlay

Sample size

Evaluation of weak Implementation areas

25. Comments/ Concurrence of the Financial Adviser obtained.

*****