The Office Memorandum issued by the Finance Ministry on June 5, 2023, sanctioning an additional ₹12,911 crore for the Polavaram irrigation project across the Godavari in Andhra Pradesh has opened a window of opportunity for the State government to swiftly execute the project.
In fact, the Water Resources Department is considering the funds flow from the Union government as one of the major milestones in the project execution.
In an exclusive interview, Shashibhushan Kumar, Principal Secretary, Water Resources Department, told The Hindu that “as per the normal guidelines on national projects for the country, the entire project goes under a particular project cost. The government does not insist on a component cost while making payments, or while reimbursing the payments done by the State governments. But, in the case of the Polavaram project, because of certain historical reasons, the concept of component-wise restrictions on payments had been introduced about three-and-a-half-years back within the overall project cost.”
“This is basically hampering the reimbursement in quick time. As a result, at one point of time, ₹2,750 crore was held up for reimbursement at the Government of India level on the grounds that the component-wise restrictions were breached with respect to certain components, though the overall project cost was not touched,” Mr. Shashibhushan Kumar said.
“This is causing a problem in the cash flow for the State government. Though the State government is paying the full amount of money for the work done, the same is not being reimbursed by the Government of India because of this restriction on component-wise expenditure,” he added.
“This restriction, popularly known in the department as component-wise restriction, has now been withdrawn in the Office Memorandum issued by the Finance Ministry,” he explained.
Mr. Shashibhushan Kumar further said that “this will ensure in the faster completion of the project.”
“The Polavaram project, which has various components, obviously has different stages of progress. The faster the component is executed the faster the payment is made. So, there will be no requirement to cap the cost of different components. We will be having freedom to spend on different components within the overall project.”
In the Office Memorandum, the Central government maintained that “as per the request of the Government of Andhra Pradesh and the recommendations of the Department of Water Resources, RD & GR received in the Department of Expenditure on February 6, 2023, this department has no objection to remove the component-wise ceiling.”
The Finance Ministry also maintained that “this department has no objection to additional funding for completing the balance work of Polavaram.”
While issuing the memorandum, the Ministry stated that “the money is sanctioned with the approval of the Finance Minister.”
