Project Appraisal and Management Division

The Project Appraisal and Management Division (PAMD) undertakes the appraisal of public-funded projects and schemes costing Rs 500 crore and above in consultation with the subject divisions of NITI Aayog. This is done before they are considered for recommendation/decision by the Public Investment Board or Expenditure Finance Committee (depending on the nature of the project and its cost).  

PAMD appraises proposals of the Ministry of Railways costing Rs 500 crore and above, to be considered by the Expanded Board of Railways (EBR). PAMD also appraises Revised Cost Estimate (RCE) proposals to analyze the factors attributed to cost and time overruns and their impact on viability.

NITI Aayog through its appraisal memorandums has been instrumental in suggesting and bringing about systemic improvements aimed at the efficacy of public sector schemes and spending in terms of delivery and outcomes. This Division has been accordingly assigned to discharge the following functions:  

• Prescribe guidelines and develop formats for the submission of proposals for projects and programmes for techno-economic appraisal;

• Undertake research studies to improve the methodology and procedure for appraisal of projects and programmes;

• Undertake techno-economic appraisal of major projects and programmes in the public sectors; and

• Assist Central Ministries to establish proper procedures for the preparation of reports of projects and programmes.

PAMD actively engages with various Departments, State Governments, and statutory bodies.

• Department of Expenditure, Ministry of Finance

• All Central Ministries and Departments

During FY 2020–21, appraisal of 196 schemes/programmes contained in the EFC/PIB/EBR proposals and involving an outlay of Rs 41,40,349 crore was undertaken. The sectoral distribution of projects appraised from 1 April 2020 to 31 March 2021 is set out in the table below:  

Production-Linked Incentive Scheme

NITI Aayog assisted in designing and formulating the contours of the Production-Linked Incentive (PLI) scheme for active pharmaceutical ingredients, high-efficiency solar PV modules, medical devices and mobile manufacturing sectors, among others.

National Program and Project Management Policy Framework

NITI Aayog had constituted a task force on project and program management, with the objective of laying down a plan of action advocating short- and long-term strategies for improving project and program management practices and aligning them with global best practices. The task force made several suggestions. It underlined efforts at the planning stage and recommended augmenting organisational skillsets, improving stakeholder management, leveraging technology, tools and techniques, the need for more efficiency and transparency in procurement, establishing robust project governance, and the need to develop a national policy framework. Consequently, the ‘National Program and Project Management Policy Framework’ (NPMPF), envisaged to bring about radical reforms in the way infrastructure projects are executed in India, was launched on 28 October 2020. Hon’ble Union Ministers Shri Nitin Gadkari and Shri Piyush Goyal released the Indian Infrastructure Body of Knowledge, a book on the practice of program and project management in India.

Indian Public Procurement Reforms (Alternatives to ‘L1’)

NITI Aayog is working on reforms in public procurement. Currently, significant government expenditure is made towards public procurement of goods, works and services. There is a long-standing need for reviewing the efficacy of the existing methodology of bidder selection, through the Least Cost Selection (or ‘L1’) method. For high-impact projects and state-of-the-art equipment involving a high level of customisations, specialisation and cutting-edge technology, the L1 method often results in sub-optimal delivery, non-performances, higher life cycle cost, delays and arbitrations.

Based on detailed deliberations with various stakeholders, NITI Aayog has come up with a bouquet of options of alternative procurement strategies, which can be considered for inclusion in the General Financial Rules (GFR) 2017. This will enable public procurement authorities and agencies to select the appropriate method depending on project-specific requirements in a transparent manner and after exercising due diligence. It is under deliberation with the Ministry of Finance, CVC and CAG.