PMO focused on infusing liquidity in construction sector
In a bid to boost economy and revive the construction sector in the country, the Narendra Modi government has directed all ministries and departments to expedite pending payments to contractors and construction companies. The objective is to infuse liquidity in the market and create more job opportunities.
Over the last few years increasing number of multi-crore infrastructure and construction projects got entangled in legal issues and court proceedings, virtually blocking growth of India’s most promising business sector. Hitherto, the construction sector was providing one of the largest segments of direct and indirect employment across the country.
Prime Minister Narendra Modi had instructed NITI Aayog in 2016 to find a breakthrough in this direction and later the Cabinet Committee on Economic Affairs (CCEA) approved various measures to infuse liquidity in the construction sector. Yet certain legal hassles remained.
Recently in a letter (dated November 28, 2019) the Project Management and Appraisal Division (PAMD) of Niti Aayog instructed the Union Law Ministry and the departments concerned to ensure that contractors are paid 75 per cent of arbitral awards against bank guarantee.