A separate Division named 'Project Appraisal Division' was set up in the erstwhile Planning Commission in 1972 to undertake techno-economic appraisal of major projects and programmes in the public sector for facilitating investment decisions by the Government.
It was reconstituted as Project Appraisal and Management Division (PAMD) on 6th January, 1994. The PAMD undertakes appraisal of public funded plan projects and schemes in consultation with the subject divisions of the NITI Aayog before these are considered for recommendation/decision by the Public Investment Board or Expenditure Finance Committee depending upon the nature of the project and project cost. The Projects / Schemes costing above Rs.500 crore are appraised by this Division (w.e.f. 29-08-2014 as per enhanced delegation of powers issued by the Ministry of Finance (Department of Expenditure) vide O.M. No. 24(35)/PF-II/2012 dated 29th August 2014).
The appraisal by PAMD broadly includes need and justification for the project/scheme, demand-supply gap in development, technical feasibility, organizational, managerial and financial capabilities of project authorities, reliability of cost estimates, financial and economic viability etc. of the projects/schemes. In addition, proposals for Revised Cost Estimates are also appraised by PAMD.