Prime minister office concentrates on’construction business’, creating tasks.
In an attempt to increase economy and revive the building industry in the nation, the Narendra Modi government has directed all ministries and departments to expedite pending payments to contractors and construction firms. The target is to infuse liquidity on the market and create more job opportunities.
Increasing quantity of construction projects and infrastructure got entangled in legal problems and court proceeding , virtually blocking expansion of India’s most promising small business sector. Hitherto, the construction sector provided one of the sections of direct and indirect employment.
Yet legal hassles stayed.
Recently in a letter (dated November 28, 2019) that the Project Management and Appraisal Division (PAMD) of Niti Aayog educated the Union Law Ministry and the departments involved to ensure that contractors are paid 75 percent of arbitral awards against financial assurance. “The CCEA has contemplated proposition of NITI Aayog (on November 20) and has declared that 75 per cent of these payments will be paid by the government entities to contractors against a bank guarantee and not because of its interest component,” says the letter addressed to Cabinet Secretary, Law Ministry and other departments involved.
The letter further shows that the Attorney General of India in consultation with the department of matters will ensure that of supplying Government entities with legal opinion process will be completed within 30 days. In simpler words, the PMO wants that payments should not be subject to any additional legal hindrances, and should be released on a priority basis to infuse liquidity in the building industry as soon as possible. The correspondence of PAMD says that all concerned ministries”shall issue instructions to various authorities entities for taking required action on the issue expeditiously”.
The instructions have to be granted, says the letter, to”all Public Sector Undertakings of Central authorities, all autonomous businesses of Centre and businesses wherein paid up share capital of Central government is more than fifty per cent.” Sources from the NITI Aayog explained that primary objective of the government is to release payment to contractors in an attempt to revive the entire construction sector and ultimately boost the industrial ecosystem of the country that is apparently slowing down.