Delegation of financial powers leads to rise in cases processed by three services

On the capital side, the Services now have powers to accord Acceptance of Necessity (AoNs) for individual schemes costing up to Rs 300 crores. It was Rs 50 crores during 2015-17 and raised to Rs 150 crores during 2017-19.

On the revenue side, the services are now authorised to clear proposals amounting up to Rs 500 crores at their level.

The new rules came into effect in October 2018 and replaced the earlier limited delegation of Rs 200 crores.

The Defence Ministry undertook a review in July 2019 to assess the impact of the delegation of financial powers to the services.

The review showed that in case of Army, against a total of 327 cases referred to the Defence Ministry for grant of AoN between April 2012 to March 31, 2015 only 132 cases were referred during 2015-17.

Similarly, there was a steady decline in AoNs accorded and contracts concluded by the Navy with approval of Defence Ministry and a corresponding increase in the number of AoNs accorded and contracts concluded due to financial powers given to the Naval Headquarters.

As far as the Air Force is concerned, around 80 - 85 per cent of the contracted value is now sanctioned at the Air headquarters itself, the release said.

It said the value of AoNs accorded and contracts concluded under delegated financial powers of commands and lower formations have also increased steadily during the period.

The AoNs by service headquarters on the capital side have gone up substantially from 21 per cent in 2015-17 to 67 per cent in 2019, the release said.

( With inputs from ANI )